'  ■ •  .  ■    ■■■■■■  ■  I  >UJ(    ..I'       ■..„.:  ';   .'     .     ■     •    ■ 


No.  492. 

'it  %  Supreme  €amtai  %  Initetr  States 

October  Term,  1916. 


Oregon  &  California  Eailroad  Company  et  al. 

Appellants, 

vs. 

The  United  States. 


On  a  Certificate  from  and  Certiorari  to  the 

United  States  Circuit  Court  of  Appeals 

for  the  Ninth  Circuit. 


BRIEF-AMICUS  CURIA. 


Francis  J.  Heney, 

Amicus  Curia. 


< 


INDEX. 

Argument  :  Page 

I.  Chamberlain-Ferris  Act  Invalid 1 

II.  Power  of  Eminent  Domain 9 

III.  Fixing  of  Just  Compensation  is  a  Judicial 

and  not  a  Legislative  Function 11 

IV.  Rule  for  Measuring  Just  Compensation. .     12 

CASES  CITED. 

Boyd  v.  United  States  (116  U.  S.  616) 15 

Miller  v.  The  State  (15  Wall.  498) 7 

Mississippi  and  Rum  River  Boom  Co.  v.  Patterson 

(98  U.  S.  206) 13 

Monongahela  Navigation  Co.  v.  United  States  (148 

U.  S.  312) 14 

The  Commonwealth  v.  The  Essex  Co.  (13*  Gray, 
239)    8 

Shields  v.  Ohio  (95  U.  S.  324) 7 

Union  Pacific  R.  R.  Co.  v.  United  States,  (9  Otto 
700)    7 

United  States  v.  Gettysburg  Electric  Ry.  (160  U.  S. 

668)    ' 11 


Jn  tbe  jfaprtmt  Coitrt  of  %  ftlnitcb  States 

October  Term,  1916. 


Oregon  &  California  Railroad 
Company,  et  al.,  Appellants, 

vs. 
The  United  States. 


No.  492. 


On  a  Certificate  from  and  Certiorari  to  the 

United  States  Circuit  Court  of  Appeals 

for  the  Ninth  Circuit. 


BRIEF-AMICUS  CURIA. 


CHAMBERLAIN-FERRIS  ACT  INVALID. 

The  Chamberlain-Ferris  Act  is  invalid  because  it  is 
an  attempt  to  take  private  property  without  just  com- 
pensation and  for  private  use,  and  also  without  due 
process  of  law. 

On  the  former  appeal  in  this  case  it  was  held  by  this 
Court  that  the  Oregon  &  California  Railroad  Company 
has  a  "complete  and  absolute  grant"  of  the  lands  in- 
volved in  the  Chamberlain-Ferris  Act,  and  that  its 
power  to  sell  such  land  is  "limited  only  as  prescribed" 
in  the  granting  acts ;  or,  in  other  words,  that  the  Rail- 
road Company  is  vested  with  a  complete  and  absolute 
title  to  the  lands.  It  further  held  that  the  provisos  in 
the  grant  are  not  conditions  subsequent ;  and  that,  con- 
sequently, it  is  not  subject  to  forfeiture  by  reason  of 


any  act  or  omission  on  the  part  of  the  Railroad  Com- 
pany in  respect  thereto. 

In  other  words,  this  Court  held  that  an  indefeasible 
and  irrevocable  title  to  the  land  is  vested  in  the  Rail- 
road Company. 

The  Government  attempted  to  secure  a  forfeiture  of 
the  grant  through  judicial  proceedings,  and  this  Court 
reversed  the  judgment  of  the  trial  court  decreeing  such 
forfeiture,  and  held  that  under  the  terms  of  the  acts  of 
Congress  by  which  the  grant  was  made,  the  Govern- 
ment could  not  secure  a  mandatory  injunction  com- 
pelling the  Railroad  Company  to  permit  settlers  to  go 
upon  the  land  or  to  make  sales  thereof  to  them. 

This  Court  held  that  the  only  judgment  to  which  the 
Government  was  entitled  under  its  pleadings  was  "a 
reversal  of  the  decree  of  the  District  Court,  and  "an 
injunction  against  further  violations  of  the  covenants. ' ' 

This  Court  recognized  the  fact  that  an  injunction 
against  further  violations  of  the  covenants  would  be 
"imperfect  relief",  but,  it  said  "We  can  only  enforce 
the  provisos  as  written,  not  relieve  from  them."  It 
also  said,  the  language  of  the  proviso  "is  not  directive ; 
it  is  restrictive  only." 

Moreover,  this  Court  said: 

"We  agree  with  the  Government  that  the  Com- 
pany might  choose  the  actual  settler;  might  sell 
for  any  price  not  exceeding  $2.50  an  acre ;  might 
sell  in  quantities  of  40,  60,  or  100  acres,  or  any 
amount  not  exceeding  160  acres.  And  we  add,  it 
might  choose  the  time  for  selling  or  its  use  of  the 
grants  as  a  means  of  credit,  subject  ultimately  to 
the  restrictions  imposed;"  etc. 

Obviously  it  was  for  these  reasons  that  this  Court 
did  not  give  the  relief  which  was  prayed  for  by  the 
Government  in  its  complaint,  as  follows : 

"(3)  That  a  mandatory  injunction  shall  issue 
out  of  and  under  the  seal  of  this  Court,  command- 


^ 


ing  and  requiring  the  said  defendant  Oregon  and 
California  Railroad  Company  to  offer  for  sale,  and 
sell  and  convey,  said  unsold  lands  to  any  bona  fide 
actual  settler  who  may  apply  to  purchase  the  same 
in  good  faith,  in  quantities  not  exceeding  one  hun- 
dred and  sixty  acres,  or  one  quarter  section,  for 
the  price  of  two  dollars  and  fifty  cents  per  acre, 
under  such  restrictions,  in  such  manner  and  by 
such  methods  as  the  Court  shall  deem  adequate 
and  expedient;  and  providing  that  any  and  all 
persons  who  may  be  in  any  way  aggrieved  by  the 
refusal  or  neglect  of  said  defendant  Oregon  and 
California  Railroad  Company  to  sell  or  convey 
said  lands  to  him  or  them  in  conformity  with  the 
terms  hereof,  or  who  may  be  in  any  other  manner 
aggrieved  in  the  premises,  and  hereafter  apply 
to  the  Court,  at  the  foot  of  said  judgment  and 
decree,  for  the  enforcement  thereof  in  his  or  their 
behalf." 

It  is  well  settled  that  a  judgment  or  decree  must  be 
interpreted  in  the  light  of  the  matters  that  were  before 
the  Court,  and  that  the  record  on  a  former  appeal  may 
be  looked  into  for  this  purpose. 

It  seems  perfectly  plain,  therefore,  that  this  Court 
did  decide  upon  the  former  appeal  that,  unless  and  until 
the  granting  acts  (in  so  far  as  they  are  laws)  are 
added  to,  altered,  or  amended,  the  courts  possess  no 
power  to  compel  the  Railroad  Company  to  permit 
settlers  to  go  upon  its  lands  or  to  sell  the  same  to 
settlers  or  otherwise  or  at  all.  The  Railroad  Company 
may  continue  to  choose  the  actual  settler  and  the  time 
for  selling,  and  the  Courts  cannot  interfere  with  its 
discretion  in  these  particulars. 

It  seems  equally  plain  that  Congress  has  no  power, 
without  the  consent  of  the  Railroad  Company,  to  add 
to,  alter,  or  amend  the  granting  acts  so  as  to  change 
in  any  substantial  respect  the  contractural  relations 
which  have  thereby  been  established  between  the  Gov- 
ernment and  the  Railroad  Company,  or  so  as  to  impair 
in  any  substantial  degree  the  rights  of  ownership  and 

<*U093 


the  indefeasible  and  irrevocable  "complete  and  abso- 
lute" title  which  has  vested  in  the  Railroad  Company 
under  said  granting  acts. 

It  appears,  however,  that  it  was  contended  by  the 
Government  that  more  than  1,000  persons  had  made 
application  to  purchase  from  the  Railroad  Company 
in  conformity  to  the  covenants  in  the  grant,  and  that 
ever  since  1903  the  Railroad  Company  had  been  refus- 
ing to  make  any  such  sales  of  its  said  lands.  It  further 
appears  that  it  was  contended  by  the  Railroad  Com- 
pany that  such  applications  were  made  by  persons  who 
desired  to  obtain  title  on  account  of  the  timber,  and 
not  otherwise,  and  for  the  purpose  of  speculation  only, 
and  not  in  good  faith  as  actual  settlers,  and  that  the 
lands  were  chiefly,  and  in  most  instances  solely,  of 
value  because  of  the  timber  thereon,  and  were  not  fit 
for  actual  settlement. 

This  Court  was  of  the  opinion  that  it  was  clear  that 
such  lands  as  were  fit  for  cultivation  were  more  valu- 
able for  the  timber  which  was  upon  them. 

For  these  reasons  evidently,  this  Court  concluded 
that  an  injunction  merely  against  future  violations  of 
the  covenants  would  not  afford  the  measure  of  relief 
to  which  the  facts  of  the  case  entitled  the  Government, 
and  that  under  the  circumstances  just  described,  Con- 
gress might  desire  to  relax  the  restrictions  of  the 
granting  acts  and  to  permit  the  Railroad  Company  to 
sell  to  persons  other  than  actual  settlers,  and,  perhaps, 
to  sell  the  timber  lands  in  larger  quantities  than  one 
hundred  and  sixty  acres  to  one  person. 

Consequently  this  Court  said : 

' '  "We  think  therefore  that  the  Railroad  Company 
should  not  only  be  enjoined  from  sales  in  violation 
of  the  covenants,  but  enjoined  from  any  disposition 
of  them  whatever  or  of  the  timber  thereon,  and 
from  cutting  or  authorizing  the  cutting  or  removal 
of  any  of  the  timber  thereon,  until  Congress  shall 
have  a  reasonable  opportunity  to  provide  by  legis- 


lation  for  their  disposition  in  accordance  with 
such  policy  as  it  may  deem  fitting  under  the  cir- 
cumstances, and  at  the  same  time  secure  to  the 
defendants  all  the  value  the  granting  acts  con- 
ferred upon  the  railroads." 

The  obvious  meaning  of  the  foregoing  language 
seems  to  be  that  the  Railroad  Company  should  be  en- 
joined from  any  disposition"  of  the  grant  lands  " what- 
ever" as  well  as  "from  any  disposition  of 
the  timber  thereon,  until  Congress  shall  have  a  reason- 
able opportunity  to  provide  by  legislation  for  their 
disposition"  by  the  Railroad  Company  "in  accordance 
with  such  policy  as"  Congress  "may  deem  fitting  under 
the  circumstances,"  and  at  the  same  time  secure  to  the 
Railroad  Company  "all  the  value  the  granting  acts 
conferred  upon  the  railroad. ' ' 

The  Government  makes  the  astounding  contention, 
however,  that  by  said  language,  this  Court  intended  to 
authorize  Congress  to  provide  by  legislation  for  the 
"disposition"  by  the  United  States,  instead  of  by  the 
Railroad  Company,  of  the  aforesaid  lands  to  which  the 
Railroad  Company  has  "a  complete  and  absolute 
grant"  "with  power  to  sell,  limited  only 

as  prescribed,"  as  well  as  with  power  to  "choose  the 
actual  settler, ' '  and  to  ' '  sell  for  any  price  not  exceeding 
$2.50  an  acre,"  and  to  "sell  in  quantities  of  40,  60,  or 
100,  or  any  amount  not  exceeding  160  acres,"  and  to 
' '  choose  the  time  for  selling  or  its  use  of  the  grants  as 
a  means  of  credit." 

The  mere  statement  of  this  contention  would  seem 
to  furnish  its  own  refutation. 

As  some  of  the  grant  lands  are  fit  for  settlement  and 
cultivation  and  as  other  parts  thereof  are  so  heavily 
covered  with  valuable  timber  that  they  are  unfit  fox- 
cultivation,  and  as  still  other  parts  thereof  are  less 
heavily  covered  with  timber,  and,  while  fit  for  cultiva- 
tion, are  more  valuable  for  the  timber  thereon,  and 
as   the  Railroad   Company  is   required  to   pay  local 


6 


County  and  State  taxes  upon  all  of  the  patented  lands, 
and  as  it  is  the  undoubted  policy  of  the  Government 
to  have  these  enormous  holdings  of  lands  and  the 
timber  and  minerals  thereon,  put  to  the  highest  use 
possible  by  as  large  a  number  of  its  citizens  as  prac- 
ticable, at  as  early  a  time  as  practicable,  it  might  well 
have  been  expected  by  this  Court  that  Congress  would 
desire  to  add  to,  alter,  or  amend  the  granting  acts  in 
so  far  as  relates  to  the  disposition  of  these  lands  by 
the  Railroad  Company,  and  particularly  to  relax  the 
restrictions  of  the  grant  in  regard  to  the  sale  of  the 
heavily  timbered  land  to  actual  settlers  only  or  in 
tracts  of  not  to  exceed  160  acres,  as  well  as  in  regard  to 
the  maximum  price  of  $2.50  per  acre.  Obviously,  it 
would  be  to  the  advantage  of  both  the  public  and  the 
Railroad  Company  to  have  certain  changes  made  in  the 
terms  of  the  restrictions  in  the  granting  acts.  Some 
changes  might  be  desired  which  could  only  be  made 
with  the  consent  of  the  Railroad  Company. 

As  a  matter  of  public  policy  Congress  might  desire 
to  alter  or  amend  the  granting  acts  by  removing  or 
relaxing  some  of  the  restrictions  upon  the  sale  of  the 
lands  by  the  Railroad  Company.  This  could  undoubt- 
edly be  done  without  any  formal  consent  by  the  latter. 

Perhaps  Congress  possesses  power  to  alter  or  amend 
the  granting  acts  so  as  to  require  or  compel  the  Rail- 
road Company  to  permit  settlers  to  go  upon  such  lands 
as  are  fit  for  cultivation,  and  to  sell  not  more  than  160 
acres  to  any  such  settler,  and  to  fix  the  period  of  settle- 
ment which  shall  entitle  such  settler  to  purchase  such 
lands.  Perhaps  such  amendatory  legislation  could  give 
such  settler  the  right  to  maintain  suit  in  the  proper 
Federal  Court  to  enforce  the  right  of  purchase  thus 
acquired  by  him. 

It  is  entirely  clear  that  Congress  does  have  power  to 
add  to,  alter,  or  amend  the  granting  acts  in  any  way 
that  does  not  impair  the  substantial  vested  rights  of  the 
Railroad  Company  in  the  granted  lands,  as  defined  by 


7 
this  Court  in  its  opinion  and  judgment  on  the  former  ap- 
peal. It  seems  equally  clear  that  by  its  aforesaid  lan- 
guage this  Court  intended  to  have  the  status  quo  of  the 
grant  lands  preserved  for  a  reasonable  length  of  time 
to  afford  Congress  an  opportunity  to  enact  such  legis- 
lation only. 

In  the  case  of  Union  Pacific  R.  R.  Co.  v.  United 
States  (9  Otto,  700)  this  Court  said: 

"No  change  can  be  made  in  the  title  created  by 
the  grant  of  the  lands,  or  in  the  contract  for  the 
subsidy  bonds,  without  the  consent  of  the  corpora- 
tion.   All  this  is  indisputable." 

In  the  same  case  this  Court,  in  referring  to  the  power 
of  Congress  reserved  in  a  granting  act  to  add  to,  alter, 
amend,  or  repeal  the  same,  said : 

"That  this  power  has  a  limit,  no  one  can  doubt. 
All  agree  that  it  cannot  be  used  to  take  away  prop- 
erty already  acquired  under  the  operation  of  the 
charter,  or  to  deprive  the  corporation  of  the  fruits 
actually  reduced  to  possession  of  contracts  law- 
fully made ;  but,  as  was  said  by  this  Court,  through 
Mr.  Justice  Clifford,  in  Miller  v.  The  State  (15 
Wall.  498)  : 

'It  may  safely  be  affirmed  that  the  reserved 
power  may  be  exercised,  and  to  almost  any  ex- 
tent, to  carry  into  effect  the  original  purposes  of 
the  grant,  or  to  secure  the  due  administration  of 
its  affairs,  so  as  to  protect  the  rights  of  stock- 
holders and  of  creditors,  and  for  the  proper  dis- 
position of  its  assets ;  and,  again,  in  Holyoke  v. 
Lyman  (15  Wall.  519),  To  protect  the  rights  of 
the  public  and  of  the  corporators  or  to  promote 
the  due  administration  of  the  affairs  of  the  cor- 
poration.' " 

In  Shields  v.  Ohio  (95  U.  S.  324),  the  Court  said: 

' '  The  power  of  alteration  and  amendment  is  not 
without  limit.    The  alterations  must  be  reasonable : 


8 


they  must  be  made  in  good  faith;  they  must  be 
consistent  with  the  scope  and  object  of  the  act  of 
incorporation.  Sheer  oppression  and  wrong  can- 
not be  inflicted  under  the  guise  of  amendment  or 
alteration.  Beyond  the  sphere  of  reserved  powers, 
the  vested  rights  of  property  of  corporations,  in 
such  cases,  are  surrounded  by  the  same  restriction, 
and  are  as  inviolable  as  in  other  cases. 

In  the  leading  case  of  The  Commonwealth  v.  The 
Essex  Company  (13  Gray,  239),  Chief  Justice  Shaw  ex- 
presses the  rule  in  apt  language  as  follows : 

"The  rule  to  be  extracted  is  this,  that  when 
under  power  in  a  charter,  rights  have  been  ac- 
quired and  become  vested,  no  amendment  or  alter- 
ation of  the  charter  can  take  away  the  property  or 
rights  which  have  become  vested  under  a  legiti- 
mate exercise  of  the  powers  granted." 

The  same  principle  is  expressed  in  many  different 
forms  in  an  innumerable  number  of  cases. 

In  the  case  at  bar  the  Government  brought  suit  to 
secure  a  forfeiture  of  the  grant  of  lands  which  was  ac- 
quired by  the  Oregon  &  California  Railroad  Company, 
and  also  to  recover  the  excess  amount  of  money  which 
had  been  received  by  said  Railroad  Company  from  the 
sale  of  some  of  its  grant  lands  contrary  to  the  restric- 
tive covenants  of  the  grant.  The  trial  court  decreed 
the  forfeiture  but  denied  the  right  of  the  Government 
to  recover  from  the  Railroad  Company  such  excess 
money.  This  Court  reversed  the  judgment  of  the  trial 
court,  but  it  expressed  no  opinion  and  gave  no  direction 
to  the  trial  court  in  regard  to  its  denial  of  the  right  of 
the  Government  to  recover  such  excess  money. 

The  Chamberlain-Ferris  act  proceeds  upon  the 
theory  that  ' '  all  the  value  the  granting  acts  conferred 
upon  the  Railroad"  was  the  right  to  receive  the  gross 
sum  of  $2.50  per  acre  for  the  total  number  of  acres  of 
land  contained  in  the  grants,  and  that  it  had  no  vested 


rights  in  the  grant  which  could  not  be  ignored,  re- 
pudiated, or  taken  away  from  it  by  the  Government 
through  legislative  action,  provided  only  that  it  was 
secured  in  its  right  to  receive  that  total  and  gross 
amount  of  money  at  some  time  in  the  future,  which  the 
Government  might  consider  reasonable;  and  that  no 
allowance  need  be  made  for  the  expense  of  administer- 
ing the  grant  or  for  taxes  paid  to  the  counties  and 
State  by  the  Eailroad  Company. 

The  right  to  exercise  dominion  over  the  land,  and  to 
choose  the  settlers,  and  to  sell  for  less  than  $2.50  per 
acre,  and  in  any  quantities  less  than  160  acres,  and  to 
choose  the  time  for  selling,  and  to  use  the  grant  as  a 
means  of  credit,  are  all  discarded  as  of  no  value,  or  as 
being  fully  compensated  for  by  the  maximum  price  of 
$2.50  per  acre  to  be  paid  in  the  manner  specified  in  the 
act. 

POWER  OF  EMINENT  DOMAIN. 

It  is  contended  by  the  Government  that  the  Chamber- 
lain-Ferris Act  is  sustainable  upon  the  theory  that  in 
so  far  as  it  takes  the  land  and  property  of  the  Railroad 
Company  it  is  an  exercise  by  the  Government  of  the 
power  of  eminent  domain.  This  contention  will  hardly 
stand  analysis.  The  argument  that  the  land  is  taken 
for  a  public  use  because  the  original  purpose  of  the 
grant  was  to  secure  the  settlement  of  that  part  of  the 
country,  and  because  the  proceeds  of  the  sales  of  the 
land  "are  to  go  to  purposes  undoubtedly  public",  is 
rather  attenuated,  to  say  the  least. 

The  avowed  purpose  of  the  Government  is  to  resell 
the  land  to  private  parties.  It  is  difficult  to  understand 
by  what  process  of  reasoning  the  conclusion  can  be 
reached  that  the  land  is  thus  to  be  devoted  to  a  public 
use,  merely  because  the  proceeds  from  its  sale  are  to  be 
applied  to  public  purposes.    The  fact  that  a  part  of  the 


10 

proceeds  is  to  be  put  in  an  ''irreducible  school  fund", 
and  that  another  part  of  it  is  to  be  expended  for 
common  schools,  roads,  highways,  bridges,  and  port 
districts,  and  that  another  part  of  it  is  to  be  expended 
for  reclamation  purposes,  and  that  only  ten  per  cent, 
of  it  is  to  be  put  in  the  "general  fund  of  the  Treasury", 
may  serve  to  make  the  law  popular;  but  it  can  hardly 
be  said  to  relate  back  and  make  the  sale  of  the  lands  to 
private  parties  a  public  use.  If  all  of  the  proceeds  were 
to  be  put  in  the  "general  fund  of  the  Treasury",  it 
could  just  as  well  be  argued  that  the  exercise  of  the 
power  of  eminent  domain  by  the  Government  was  justi- 
fiable, upon  the  same  theory. 

The  argument  that  the  land  is  to  be  devoted  to  a 
public  use,  because  it  is  to  be  resold  by  the  Government 
in  many  parcels  to  many  private  persons,  and  because 
the  policy  of  the  Government  to  secure  the  settlement 
of  the  country  will  thus  be  advanced,  is  equally  un- 
sound. In  the  first  place,  it  is  admitted  by  the  Govern- 
ment that  a  large  part  of  the  land  is  covered  with 
timber  and  will  be  unfit  for  cultivation  or  settlement 
for  many  years  to  come.  The  Chamberlain-Ferris  Act 
recognizes  this  fact  and  provides  for  the  sale  of  the 
timber  exclusive  of  the  land.  Indeed,  the  terms  of  the 
act  are  calculated,  and  seem  intended  to  enable  the 
Government,  to  sell  all  the  timber  that  is  on  the  lands 
at  the  best  prices  obtainable ;  and  it  was  contended  by 
the  Government  on  the  former  appeal  of  this  case  that 
the  value  of  these  lands  is  about  twenty-five  million 
dollars  in  excess  of  the  amount  of  $2.50  per  acre  which 
the  railroad  company  is  entitled  to  receive,  and  that 
this  enormous  excess  value  arises  largely  and  almost 
entirely  from  the  timber  thereon. 

It  is  axiomatic  that  if  the  Government  desires  to  take 
this  land  under  its  power  of  eminent  domain  it  can  do 
so  only  for  a  public  use  and  only  by  paying  just  com- 
pensation for  the  same. 


11 


This  Court  has  frequently  decided  what  constitutes  a 
public  use  in  this  sense.  It  is  contended  by  the  Govern- 
ment that  the  case  at  bar  falls  within  the  principles  laid 
down  by  this  Court  in  the  case  of  the  United  States  v. 
Gettysburg  Electric  Railway  Co.  (160  U.  S.  668),  be- 
cause in  that  case  this  Court  said : 

"When  the  legislature  has  declared  the  use  or 
purpose  to  be  a  public  one,  its  judgment  will  be 
respected  by  the  Courts,  unless  the  use  be  palpably 
without  reasonable  foundation." 

Referring  to  the  case  at  bar  counsel  for  the  Govern- 
ment say: 

i  t  There  was  no  formal  declaration  here  that  the 
purpose  was  public,  but  that,  we  apprehend,  is  not 
necessary  when  its  character  is  evident,  as  in  this 
case." 

In  this  particular  it  is  conceded  that  counsel  for  the 
Government  are  correct.  The  Chamberlain-Ferris  Act 
contains  no  declaration  that  the  purpose  is  public. 
Moreover,  ' '  its  character  is  evident. ' '  It  seeks  to  take 
the  land  of  the  Railroad  Company  for  the  purpose  of 
permitting  the  Government  to  sell  the  timber  from  it 
to  private  parties  at  an  enormous  profit,  as  well  as  to 
resell  the  land  to  private  parties  for  private  use. 

FIXING   OF   JUST   COMPENSATION   IS   A   JU- 
DICIAL AND  NOT  A  LEGISLATIVE 
FUNCTION. 

In  the  Chamberlain-Ferris  Act  Congress  has  assumed 
to  fix  the  amount  of  compensation  which  ought  to  be 
paid  to  the  Railroad  Company  for  its  lands.  In  the 
case  of  Monongahela  Navigation  Co.  v.  United  States, 
(148  U.  S.  312),  this  Court  said: 


12 


"The  question  presented  is  jnot  whether  the 
United  States  has  the  power  to  condemn  and  ap- 
propriate this  property  of  the  Monongahela  Com- 
pany, for  that  is  conceded,  but  how  much  it  must 
pay  as  compensation  therefor.  Obviously  this 
question,  as  all  others  which  run  along  the  line 
of  the  extent  of  the  protection  the  individual  has 
under  the  Constitution  against  the  demands  of  the 
Government,  is  of  importance,  for  in  any  society 
the  fullness  and  sufficiency  of  the  securities  which 
surround  the  individual  in  the  use  and  enjoyment 
of  his  property  constitute  one  of  the  most  certain 
tests  of  the  character  and  value  of  the  Govern- 
ment.    *     *     * 

"By  this  legislation  Congress  seems  to  have 
assumed  the  right  to  determine  what  shall  be  the 
measure  of  compensation.  But  this  is  a  judicial 
and  not  a  legislative,  question.  The  legislature 
may  determine  what  private  property  is  needed 
for  public  purposes ;  that  is  a  question  of  a 
political  and  legislative  character.  But  when  the 
taking  has  been  ordered,  then  the  question  of  com- 
pensation is  judicial.  It  does  not  rest  with  the 
public,  taking  the  property,  through  Congress  or 
the  legislature,  its  representative,  to  say  what 
compensation  shall  be  paid,  or  even  what  shall  be 
the  rule  of  compensation.  The  constitution  has 
declared  that  just  compensation  shall  be  paid,  and 
the  ascertainment  of  that  is  a  judicial  inquiry. 

RULE  FOR  MEASURING  JUST  COMPENSATION. 

In  the  case  at  bar  Congress  has  undertaken  to  deter- 
mine not  only  "what  compensation  shall  be  paid"  to 
the  Railroad  Company,  but  also,  "what  shall  be  the 
rule  of  compensation."  It  has  undertaken  to  apply 
as  the  proper  rule  of  compensation  the  provisos  in  the 
granting  acts  that  the  lands  should  not  be  sold  by  the 
Railroad  Company  at  a  price  in  excess  of  the  sum  of 
$2.50  per  acre.  But,  obviously,  this  is  not  the  proper 
rule  of  compensation  to  be  applied,  if  the  Chamberlain- 


13 


Ferris  Act  can  be  sustained  only  upon  the  theory  that 
it  constitutes  an  exercise  of  the  power  of  eminent  do- 
main on  the  part  of  the  Government,  because  in  that 
event  the  maximum  selling  price  fixed  by  the  granting 
acts  is  certainly  not  conclusive  on  the  question. 

In  the  case  of  Mississippi  and  Rum  River  Boom  Co. 
v.  Patterson  (98  IT.  S.  206),  this  Court  held: 

"That  in  determining  the  value  of  land  appro- 
priated for  public  purposes,  the  inquiry  must  be : 
What  is  the  property  worth  in  the  market,  from  its 
availability  for  valuable  uses,  both  now  and  in  the 
future?" 

In  that  case  this  Court  said : 

"In  determining  the  value  of  land  appropriated 
for  public  purposes,  the  same  considerations  are 
to  be  regarded  as  in  a  sale  of  property  as  between 
private  parties.  The  inquiry  in  such  cases  must 
be,  What  is  the  property  worth  in  the  market, 
viewed  not  merely  with  reference  to  the  uses  to 
which  it  is  at  the  time  applied,  but  with  references 
to  the  uses  to  which  it  is  plainly  adapted;  that  is 
to  say,  what  is  it  worth  from  its  availability  for 
valuable  uses!  Property  is  not  to  be  deemed 
worthless  because  the  owner  allows  it  to  go  to 
waste,  or  to  be  regarded  as  valueless  because  he  is 
unable  to  put  it  to  any  use.  Others  may  be  able 
to  use  it  and  make  it  subserve  the  necessities  or 
conveniences  of  life.  Its  capability  of  being  made 
thus  available  gives  it  a  market  value  which  can 
be  readily  estimated." 

And  in  the  same  case  this  Court  quoted  with  approval 
the  statement  of  the  Supreme  Court  of  New  York : 

' '  That  neither  the  purpose  to  which  the  property 
was  applied,  nor  the  intention  of  the  owner  in 
relation  to  its  future  enjoyment,  was  a  matter  of 
much  importance  in  determining  the  compensation 
to  be  made  to  him;    but  that  the  proper  inquiry 


14 


was,  what  is  the  value  of  the  property  for  the  most 
advantageous  uses  to  which  it  may  be  applied?" 

In  this  connection  it  is  important  to  observe  that  in 
the  case  of  the  Monongahela  Navigation  Company  v. 
United  States  (supra),  this  Court  said: 

"The  language  used  in  the  fifth  amendment  in 
respect  to  this  matter  is  happily  chosen.  The  en- 
tire amendment  is  a  series  of  negations,  denials  of 
right  of  power  in  the  Government;  the  last  (the 
one  in  point  here)  being:  'Nor  shall  private  prop- 
erty be  taken  for  public  use  without  just  compen- 
sation.'  The  noun  ' compensation',  standing  by 
itself,  carries  the  idea  of  an  equivalent.  Thus  we 
speak  of  damages  by  way  of  compensation  of  com- 
pensatory damages,  as  distinguished  from  punitive 
or  exemplary  damages;  the  former  being  the 
equivalent  for  the  injury  done,  and  the  latter  im- 
posed by  way  of  punishment.  So  that,  if  the  ad- 
jective 'just'  had  been  omitted  and  the  provision 
was  simply  that  property  should  not  be  taken 
without  compensation,  a  natural  import  of  the 
language  would  be  that  the  compensation  should 
be  the  equivalent  of  the  property.  And  this  is 
made  emphatic  by  the  adjective  'just.'  There 
can,  in  view  of  the  combination  of  those  two  words, 
be  no  doubt  that  the  compensation  must  be  a  full 
and  perfect  equivalent  for  the  property  taken; 
and  this  just  compensation,  it  will  be  noticed,  is 
for  the  property,  and  not  to  the  owner.  Every 
other  clause  in  this  fifth  amendment  is  personal. 
'No  person  shall  be  held  to  answer  for  a  capital 
or  otherwise  infamous  crime '  etc.  Instead  of  con- 
tinuing that  form  of  statement,  and  saying  that 
no  person  shall  be  deprived  of  his  property  without 
just  compensation,  the  personal  element  is  left  out, 
and  the  'just  compensation'  is  to  be  a  full  equiva- 
lent for  the  property  taken.  This  excludes  the  tak- 
ing into  account  as  an  element  in  the  compensation 
any  supposed  benefit  that  the  owner  may  receive 
in  common  with  all  from  the  public  uses  to  which 
his  private  property  is  appropriated,  and  leaves  it 


15 


to  stand  as  a  declaration  that  no  private  property 
shall  be  appropriated  for  public  uses  unless  a  full 
and  exact  equivalent  for  it  be  returned  to  the 
owner." 

In  the  case  at  bar  it  is  admitted  by  the  Government 
that  the  value  of  the  property  which  is  taken  from  the 
Oregon  &  California  Railroad  Company  by  the  Govern- 
ment under  the  Chamberlain-Ferris  Act  is  approxi- 
mately $30,000,000,  and  that  the  amount  to  be  paid  or 
credited  to  the  Railroad  Company  is  substantially  less 
than  $6,000,000.  Hence  it  can  hardly  be  said  that  under 
this  act,  "a  full  and  exact  equivalent"  for  the  land 
taken  is  "to  be  returned  to  the  owner." 

Even  if  it  is  conceded,  however,  for  the  purpose  of 
the  argument  that  the  Oregon  &  California  Railroad 
Company  will  receive  a  full  and  exact  equivalent,  or,  in 
other  words,  just  compensation,  under  the  Chamber- 
lain-Ferris Act  for  the  lands  taken  from  it,  then,  never- 
theless, it  is  true  that  the  act  in  question  is  invalid  and 
constitutes  a  dangerous  precedent  as  an  insidious  in- 
vasion of  the  rights  of  private  property  which  are 
guaranteed  by  the  Constitution,  by  substituting  legis- 
lative for  judicial  action,  and  thus  depriving  the  party 
of  the  right  to  a  hearing  before  the  judgment  is  pro- 
nounced. Speaking  for  this  Court,  in  Boyd  v.  United 
States  (116  U.  S.  616),  Mr.  Justice  Bradley  appropri- 
ately said : 

"Illegitimate  and  unconstitutional  practices  get 
their  first  footing  in  that  way,  namely,  by  silent 
approaches  and  slight  deviations  from  legal  modes 
of  procedure.  This  can  only  be  obviated  by  ad- 
hering to  the  rule  that  constitutional  provisions  for 
the  security  of  person  and  property  should  be 
liberally  construed.  A  close  and  literal  construc- 
tion deprives  them  of  half  their  efficacy,  and  leads 
to  gradual  depreciation  of  the  right,  as  if  it  con- 


16 


sistecl  more  in  sound  than  in  substance.  It  is  the 
duty  of  courts  to  be  watchful  for  the  constitutional 
rights  of  the  citizen,  and  against  any  stealthy  en- 
croachments thereon.  Their  motto  should  be 
obesta  principiis." 


Respectfully  submitted, 


Francis  J.  Heney, 

Amicus  Curia. 


FEB  if,  1917 

JAMES  0.  M 


No:  492 

In  the  Supreme  Court  of  the  United  States 


OCTOBER  TERM,  1916. 


CERTIORARI  TO   THE   UNITED   STATES  CIRCUIT   COURT 
OF  APPEALS  FOR  THE  NINTH  CIRCUIT. 


OREGON  AND  CALIFORNIA  RAIL- 
ROAD COMPANY,  a  Corpora- 
tion, et  al., 

Defendants  and  Appellants, 

vs. 

UNITED  STATES  OF  AMERICA, 

Appellee. 

Brief  for  Defendants  and   Appellants,   Oregon  and 
California  Railroad  Company,  Southern  Pacific 
Company,  and  Stephen  T.  Gage,  individu- 
ally and  as  trustee. 


Wm.  F.  Herein, 
P.  F.  Dunne, 
Wm.  D.  Fenton, 
Solicitors  and  Attorneys  for  said 
Defendants  and  Appellants. 
Frank  C.  Cleary, 
Of  Counsel. 


Subject  Index 

PAGES 

STATEMENT   1-12 

ASSIGNMENT  OF  ERRORS   12-13 

POINT  I.     THE  DISTRICT  COURT  ERRED  IN  EX- 
CEEDING THE  MANDATE  OP  THIS  COURT..    13-87 
The   Decree   of  the    District   Court — Its   terms 
and    scope    examined    in    the    light    of    the 

opinion   of   this   Court 13-41 

The  Grantee's  Estate   41-82 

Intrinsic    and    Corroborative    Evidence    of    the 

Granting  Acts  themselves 82-87 

POINT  II.     THE  FERRIS  ACT  IS  INVALID 87-119 

Naked  Power  of  Sale  in  Contradistinction  from 

Estate  in  Fee   98-112 

Reservation  Clause  in  the  Act  of  July  25,  1866.  .  112-118 
The  Question  of  Condemnation 118-119 

POINT  III.     COSTS  WERE  IMPROPERLY  TAXED 

AGAINST  THESE  APPELLANTS  119-124 

( 

APPENDIX  A.— Decree  on  Mandate  of  the  United 
States  Supreme  Court  signed,  made  and  entered  by 
the  United  States  District   Court 125-128 

APPENDIX    B.— Form  of  Decree   of   Mandate   tendered 

by  the  Appellants  to  said  Court  for  its  signature.  .129-130 

APPENDIX  C— The  Ferris  Act  131-144 


11 
Table  of  Cases  Cited  or  Referred  To 

A  PAGES 

Attorney  General  v.  Duke  of  Marlborough,  3  Madd.  498 .  .  77-82 

B 
Bienville  Water  Supply  Co.  v.  Mobile,  186  U.  S.  212,  222.  .117 

Bissell  v.  Goshen,  72  Fed.  545,  548,  552 37-38,  44 

Blair  v.  Chicago,  201  U.  S.  475  82 

Burke  v.  Southern  Pacific  R.  R.  Co.,  234  U.  S.  669,  679-80 

42-3,86 

Bybee  v.  0.  &  C.  R.  R.  Co..  139  U.  S.  663,  674 43-4 

C 
California  v.  San  Pablo  &  Tulare  R.  R.  Co.,  149  U.  S.  308.  . .  .12 

Campbell  v.  California,  200  IT.  S.  87,  90-93 12 

Chicago  &  Burlington  R.  R.  Co.  v.  Chicago,  166  U.  S.  226, 

235 94 

Chicago,  M.  &  St.  P.  R.  R.  Co.  v.  Wisconsin,  238  U.  S.  491, 

501-2  117 

Commonwealth  v.  Essex  Co.,  13  Gray  239,  253 113 

D 

Davidson  v.  New  Orleans,  96  U.  S.  97,  102 90,  94 

De  Peyster  v.  Michael,  6  N.  Y.  467,  506 54-5 

Detroit  v.  Detroit  P.  R.  Co.,  43  Mich.  140,  146-148 117 

F 

Fletcher  v.  Peck,  6  Cranch  135 88,  102 

G 
Gannon  v.  Peterson,  193  111.  372,  55  L.  R.  A.  701 76 

H 

Hamilton's  Works,  Vol.  3,  518-19 91 

Heath  v.  Ross,   12  Johns  140    67 

Howe  v.  Lowell,  171  Mass.  576    68-73 

Howe  v.  Lowell,  171  Mass.  582-3    82,  85 

Humbird  v.  Avery,  195  U.  S.  480,  501   95 

Houston  &  Texas  Central  Ry.  Co.  v.  Texas,  170  U.  S.  243, 

254-5  117 


Ill 

PAGES 

L 

Landers  v.  Landers,  151  Ky.  215-17   73-77 

Lessieur  v.  Price,  12  How.  76 107 

Long  Sault  Development  Co.  v.  Call,  U.  S.  Sup.  Ct.,  Dec.  11, 

1916 117-18 

Lord  v.  Veazie,  8  How.  251   11-12 

M 

Menotti  v.  Dillon,  167  U.  S.  703,  721 43 

.Miller  v.  State,  15  Wall.  478    114 

Mills  v.  Green,  159  U.  S.  651-3 11 

Missouri  Pac.  v.  Nebraska,  164  U.  S.  403-417 94 

Monongahela  Navigation  Co.  v.  U.  S.,  148  IT.  S.  312,  327..  119 
Musser  v.  McRae,  44  Minn.  343 67,  68 

N 

Nichols  v.  Southern  Oregon  Co.,  135  Fed.  233 21-2 

Northern  Trust  Co.  v.  Snyder,  77  Fed.  818 122 

0 

Ochoa  v.  Hernandez,  230  U.  S.  140,  161 116 

Oregon  &  Cal.  R.  R.  Co.  v.  United  States,  238  U.  S.  393.  .  .2,  97-8 
Oregon  &  Cal.  R.  R,  Co.  v.  United  States,  238  U.  S.  417-18.  .15-16 
Oregon  &  Cal.  R.  R.  Co.  v.  United  States,  238  U.  S.  421-2.  .  .17-18 
Oregon  &  Cal.  R.  R.  Co.  v.  United  States,  238  U.  S.  422-3 

29-30,45 

Oregon  &  Cal.  R.  R,  Co.  v.  United  States.  238  U.  S.  424-5.  .120-21 
Oregon  &  Cal.  R.  R.  Co.  v.  United  States,  238  U.  S.  428.  .  .  .18,  29 
Oregon  &  Cal.  R.  R.  Co.  v.  United  States,  238  U.  S.  432.  .7,  18,  45 
I  >regon  &  Cal.  R.  R.  Co.  v.  United  States.  238  U.  S.  432-3.  .  .19-20 
Oregon  &  Cal.  R.  R.  Co.  v.  United  States,  238  U.  S.  434-5 

'. 7,  20-21,  29,  44-5 

Oregon  &  Cal.  R.  R.  Co.  v.  United  States,  238  U.  S.  436.  .7,  14.  45 

Oregon  &  Cal.  R.  R,  Co.  v.  United  States,  238  U.  S.  437 14 

Oregon  &  Cal.  R.  R.  Co.  v.  United  States,  238  U.  S.  437-9 

7-8.24-26 

P 

Pawlett  v.  Clark,  9  Cranch  292  101 

Piatt  v.  Union  Pacific  R.  R.  Co.,  99  U.  S.  48 41.  42 

Polk  v.  Wendall,  9  Cranch  87,  99 24 


IV 

PAGES 

R 

Railway  Company  v.  Anderson,   149   U.   S.   237 ;   13   Sup. 

Ct.  843 38 

Railroad  Company  v.  Courtright,  21  Wall.  310 62 

Reeves  on  Real  Property,  Sec.  423 47-8 

Rice  v.  Railroad  Co.,  1  Black  358 9,  98-107,  108,  109 

Rice  v.  Railroad  Co.,  1  Black  378-9 105-106 

Rice  v.  Railroad  Co.,  1  Black  381-2 9,  106-7 

Roberts  v.  Cooper,  20  How.  467  44,  45 

S 

Sanford  Fork  &  Tool  Co.  Petitioner,  160  U.  S.,  p.  247 44 

Schnlenberg  v.  Harriman,  21  Wall.  44 

48-51,  52,  55,  56,  57,  61,  98,  107-109,  111 

Schulenberg  v.  Harriman,  21  Wall.  53 108 

Schulenberg  v.  Harriman,  21  Wall.  59-60 48-9, 109 

Schulenberg  v.  Harriman,  21  Wall.  62 49-50,  109 

Schulenberg  v.  Harriman,  21  Wall.  63 50 

Schulenberg  v.  Harriman,  21  Wall.  64 51 

Sibbald  v.  U.  S.,  12  Pet.  488,  492 38 

Sinking-Fund  Cases,  99  U.  S.  700 90-116 

Sinking-Fund  Cases,  99  U.  S.  718 90-91 

Sinking-Fund  Cases,  99  U.  S.  720-21 114 

Sinking-Fund  Cases,  99  IT.  S.  731 91 

Sinking-Fund  Cases,  99  U.  S.  738 92 

Sinking-Fund  Cases,  99  U.  S.  741 114 

Sinking-Fund  Cases,  99  U.  S.  742 115 

Sinking-Fund  Cases,  99  U.  S.  744 92 

Sinking-Fund  Cases,  99  U.  S.  746 93 

Sinking-Fund  Cases,  99  U.  S.  749 115 

Sinking-Fund  Cases,  99  U.  S.  757 93, 116 

Sinking-Fund  Cases,  99  U.  S.  759-760 93-4 

Story's  Equity  Jurisprudence,  Vol.  2,  Sec.  915 77 

Stearns  v.  Minnesota,  179  U.  S.  223,  259 116-17 

Street  on  Federal  Equity  Practice,  Sec.  2022 123 

T 

Terrett  v.  Taylor,  9  Cranch  43,  50 89-90, 101 

Turner  v.  Wright,  6  Jur.  N.  S.  809;  29  L.  J.  Ch.  N.  S.  598.  .  .77 


V 

PAGES 

u 

United  States  v.  Anderson,  194  U.  S.  394 63-68 

United  States  v.  Hamburg  American  Co.,  239   U.  S.  466, 

475-6 12 

United  States  v.  Inman-Paulson  Lbr.  Co.,  233  Fed.  942 95 

United  States  v.  Losekamp,  127  Fed.  959 85 

United  States  v.  Loughrey,  172  U.  S.  206 ..  .  52-54,  57,  62,  63,  67 

United  States  v.  Loughrey,  172  U.  S.  208 55 

United  States  v.  Loughrey,  172  U.  S.  209 53-4 

United  States  v.  Loughrey,  172  U.  S.  211 56 

United  States  v.  Loughrey,  172  U.  S.  217-18 58,  67 

United  States  v.  Loughrey,  172  U.  S.  219 58 

United  States  v.  Loughrey,  172  U.  S.  221 59 

United  States  v.  Loughrey,  172  U.  S.  230-31 59-60 

United  States  v.  Tennessee  &  Coosa  R.  R.  Co.,  176  U.  S. 

242 60-63 

United  States  v.  Union  Pacific  R.  R.  Co.,  91  U.  S.  72,  81 84 

United  States  v.  Union  Pacific  R.  R.  Co.,  98  U.  S.  569.  613.  . .  .42 
United  States  v.  Union  Pacific  R.  R.  Co..  160  U.  S.  1,  32-33.  .  .117 

W 

WVilsingham's  Case.  Plowd. — Chitty  75 

Washburn  Real  Property.  4th  Ed.,  Vol.  1.  Page  89,  Sec.  86 75 

Washburn  Real  Property,  5th  Ed.,  Page  95 54 

Weed  v.  Woods,  75  N.  H.  581 75 

Wellington  et  al..  Petitioners,  16  Pick.  87.  99 71-2 

Wilkinson  v.  Leland,  2  Pet.  627,  657-8 89 

Windsor  v.  McVeigh,  93  U.  S.  282-3 39 


No.  492 

In  the  Supreme  Court  of  the  United  States 


OCTOBER  TERM,  1916. 


CEBTIOBABI    TO    THE   UNITED    STATES  CIRCUIT   COUBT 
OF  APPEALS  FOB   THE  NINTH  CIBCUIT. 


OREGON  AND  CALIFORNIA  RAIL- 
ROAD COMPANY,  a  Corpora- 
tion, et  al., 

Defendants  and  Appellants, 

vs. 

UNITED  STATES  OF  AMERICA, 

Appellee. 

Brief  for  Defendants  and   Appellants,   Oregon   and 
California  Railroad  Company,  Southern  Pacific 
Company,  and  Stephen  T.  Gage,  individu- 
ally and  as  trustee. 


STATEMENT. 
This  case,  the  Oregon  Land  Grant  Case,  is  now 
here  for  the  second  time.     It  came  here  the  first 
time  from  the  Circuit  Court  of  Appeals  for  the 


Ninth  Circuit  on  certificate  and  certiorari;  the 
cause  was  heard  in  its  entirety;  and  the  opinion  of 
this  court,  announced  by  Mr.  Justice  McKenna,  is 
reported  in  238  U.  S.,  pages  393-439. 

The  decree  below  was,  by  this  court,  "reversed 
and  cause  remanded  to  the  District  Court  for  fur- 
ther proceedings  in  accordance  with  this  opinion". 

On  return  of  the  cause  to  the  District  Court  of 
Oregon,  a  decree  was  therein  entered  on  December 
9,  1915,  as  a  sequel  and  in  assumed  pursuance  of 
the  mandate  of  this  court.  This  decree,  as  appel- 
lants saw  it,  was  not  in  accordance  with  the  man- 
date. In  their  view,  it  went  beyond  the  mandate 
of  this  court;  it  decided  and  assumed  to  conclude 
matters  in  excess  of  the  mandate;  more  specifically, 
it  undertook  to  impose  a  construction  upon  the 
rights  of  these  appellants  in  respect  to  the  timber 
and  the  mineral  content  of  the  land  grant  in  ques- 
tion, not  warranted,  it  is  believed,  by  the  opinion 
and  mandate  of  this  court.  Appellants  accordingly 
took  the  case  by  appeal  to  the  Circuit  Court  of 
Appeals  for  the  Ninth  Circuit;  and  from  that  court, 
by  certificate  and  certiorari,  the  cause  is  brought 
here  for  the  second  time. 

A  land  grant  was  made  in  1862  to  the  Union  Pa- 
cific and  Central  Pacific  Railroads,  in  aid  of  the 
construction  of  a  transcontinental  railroad  from  the 
Missouri  River  to  San  Francisco  Bay  on  the  Pa- 
cific Ocean.  The  extension  of  that  trans-continental 
railroad  from  some  point  in  California,  fixed  at 


Roseville,  near  Sacramento,  northward  through 
California  and  Oregon  to  the  City  of  Portland,  was 
in  the  mind  of  Congress  in  1866;  and  in  that  year 
a  land  grant  was  made  in  aid  of  the  construction 
of  such  a  railroad.  So  much  of  the  land  as  lay 
within  the  State  of  Oregon,  was  granted  to  such 
company  as  should  be  designated  by  the  Oregon 
Legislature,  and  upon  that  company  was  laid  the 
burden  of  building  the  road  from  Portland  south 
to  the  interstate  line  between  Oregon  and  Cali- 
fornia. The  Act  of  1866  was  amended  in  1869, 
and  in  1870  an  additional  act  was  passed  granting 
land  in  aid  of  the  construction  of  a  railroad  from 
Portland  by  way  of  Forest  Grove  to  tidewater  at 
Astoria  on  the  Oregon  Coast,  and  in  a  southerly 
direction  to  McMinnville,  an  Oregon  point.  The 
land  embraced  in  the  Act  of  1866,  as  amended  in 
1869,  and  in  the  Act  of  1870,  is  the  Oregon  land 
grant. 

The  act  of  1866,  as  it  was  amended  in  1869,  pro- 
vided,— and  much  the  same  provision,  in  terms,  was 
in  the  act  of  1870, — "that  the  lands  granted  by 
the  act  aforesaid  shall  be  sold  to  actual  settlers  only, 
in  quantities  not  greater  than  one-quarter  section 
to  one  purchaser  and  for  a  price  not  exceeding 
$2.50  per  acre."  But  the  Acts  of  1866  and  1869 
and  of  1870  were  relatively  slow  in  arriving.  The 
Pre-emption  Law  of  September  4,  1841,  the  Ore- 
gon Donation  Act  of  September  27,  1850,  and  the 
Homestead  Law  of  May  20,  1862,  had  gone  before. 


The  valley  lands,  adaptable  for  settlement  and 
falling  within  the  primary  limits  of  the  railroad 
grant,  had  been  taken  up  under  these  earlier 
statutes.  The  railroad  company  was  put  to  it  to 
find  its  lands  within  the  indemnity  limits  of  the 
grant, — not  valley  lands  these,  but  in  great  part 
mountain  forests.  Some  land  there  was,  susceptible 
of  cultivation,  not  a  great  deal  of  it,  and  this  the 
railroad  company,  in  the  earlier  years  of  the  grant, 
disposed  of  for  settlement,  as  contemplated  by  the 
settlers'  clause  of  the  granting  act.  Later,  and 
when  the  timber  began  to  take  on  value,  the  com- 
pany made  sales  of  the  timbered  land — for  lumber 
was  soon  to  become,  as  it  did,  the  principal  industry 
of  the  state, —  and  those  sales,  naturally,  were  in 
larger  quantities  than  the  small  parcels  of  the 
settlers'  clause,  and  at  somewhat  higher  prices,  and 
not  to  farmers  but  to  lumbermen.  These  tran- 
sactions, in  departure  from  the  literal  requirements 
of  the  settlers'  clause,  were  open  and  above  board. 
They  were  the  only  practicable  way  of  making  the 
grant  responsive  to  what  this  court  has  held  to  be 
the  primary  purpose  of  the  act,  namely,  to  aid  in 
the  construction  of  a  railroad;  they  were  matters 
of  common  knowledge;  they  were  matters  of  public 
record ;  they  were  known  to  the  people  of  the  state, 
to  the  courts  of  the  state  and  of  the  nation,  to  the 
Land  Department  and  the  executive  government  and 
to  both  houses  of  Congress.  They  were  reported 
with  the  utmost  particularity  of  transaction,   in 


5 

respect  to  the  location  and  quantity  of  the  lands 
sold  and  the  prices  paid,  to  a  bureau  of  the  Land 
Department  specially  constituted  for  the  purpose 
of  receiving  and  acting  on  such  information,  and 
this  information,  in  all  its  particularity,  was  trans- 
mitted to  the  Secretary  of  the  Interior,  and  by  him 
to  the  President,  and  by  the  President  to  both  houses 
of  Congress,  and  was  there  referred  to  the  appro- 
priate committees  and  perpetuated  as  executive 
documents;  and  this  information  was  so  communi- 
cated and  transmitted  yearly  and  half-yearly  dur- 
ing a  period  of  twenty-five  years,  and  in  pursuance 
of  the  act  of  Congress  of  1879  precisely  calling  for 
the  information.  Everything  that  was  done  by  the 
railroad  company  in  dealing  with  these  lands,  was 
in  the  light  of  day,  and  went  on  for  over  a  genera- 
tion, indeed  for  nearly  forty  years,  without  objec- 
tion from  the  State  of  Oregon,  without  objection 
from  the  Land  Department  or  the  Executive  govern- 
ment or  Congress.  If  a  railroad  company  was  ever 
justified,  or  the  stockholder  who  put  his  money  into 
it,  or  the  bondholder  who  loaned  his  money  to  it,  in 
believing  that  a  course  of  conduct  had  been  ratified 
by  general  acquiescence,  and  a  departure  from  the 
literal  and  exact  language  of  a  statute  had  been 
waived  and  assented  to,  the  case  at  bar  is  a  reveal- 
ing instance. 

Indeed,  Congress,  at  no  time,  of  its  own  initiative, 
called  into  question  the  course  of  dealing  with  these 
lands  by  the  company.    It  was  a  memorial  of  the 


Legislature  of  Oregon,  procured  by  interested  par- 
ties to  be  adopted  in  the  year  1907,  and  complaining 
of  the  temporary  withdrawal  by  the  railroad  com- 
pany of  these  granted  lands  from  sale, — upon  the 
ground,  as  stated  in  the  bill,  "of  the  great  injury 
inflicted  upon  commercial  and  industrial  condi- 
tions,"— that  moved  Congress  to  take  action.  The 
Attorney-General  was  authorized  by  joint  resolu- 
tion, to  proceed  against  the  company,  and  the  suit 
in  equity,  now  pending,  and  of  which  this  appeal 
is  a  phase,  then  followed. 

It  will  be  recalled  that  the  first  appeal  was  taken 
from  the  decree  of  the  District  Court  of  Oregon, 
forfeiting  the  title  of  the  company  to  the  granted 
lands,  as  for  a  breach  of  the  settlers'  clause,  con- 
strued in  that  court  to  be  a  condition  subsequent. 
Upon  a  certificate  of  questions  from  the  Circuit 
Court  of  Appeals  to  this  court,  the  whole  record 
was  ordered  up  and  the  case  was  considered  and 
decided  at  large.  It  was  held  here  that  the  settlers' 
clause  was  not  a  condition  subsequent,  that  it  was 
a  covenant  only,  enforceable  by  injunction.  The 
decree  of  the  District  Court  of  Oregon  was  reversed, 
and  the  cause  was  remanded  to  that  court  for  fur- 
ther proceedings  in  accordance  with  the  opinion  of 
the  Supreme  Court.  It  is  the  decree  entered  by  the 
District  Court  in  such  further  proceedings,  that  the 
pending  appeal  now  brings  in  question,  and  for  the 
reason,  as  it  is  submitted,  that  the  decree  is  not  in 
accordance  with  the  opinion  of  the  Supreme  Court. 


This  court  has  ruled  that  "there  was  a  complete 
and  absolute  grant  to  the  railroad  company,  with 
power  to  sell,  limited  only  as  prescribed"  by  the 
settlers'  provisos.  (238  U.  S.,  pp.  434-5)  And  as 
to  these  provisos,  it  was  said  by  this  Court :  "Their 
language  is  not  directive,  it  is  restrictive  only;  and 
with  this  exception  the  grant  is  unqualified."  (238 
U.  S.  p.  432) 

Upon  the  fullest  consideration,  it  was  determined 
here  that  the  settlers'  proviso  was  not  a  condition 
subsequent,  that  it  was  a  covenant,  and  the  for- 
feiture of  the  railroad  company's  estate  was  re- 
versed. Injunctive  relief,  as  being  appropriate  to 
the  provisos,  in  their  character  of  covenant,  was 
awarded — "an  injunction  against  further  violations 
of  the  covenants".  (238  U.  S.,  p.  436)  A  tem- 
porary restraining  order  was  also  made — six 
months  being  the  period  indicated — with  the  object, 
as  the  Government's  motion  for  certiorari  puts  it, 
of  "preserving  the  status  of  the  property  until  Con- 
gress might  act".  The  language  of  the  opinion  (238 
U.  S.,  p.  438)  is  as  follows: 

"The  lands  invite  now  more  to  speculation 
than  to  settlement,  and  we  think,  therefore, 
that  the  railroad  company  should  not  only  be 
enjoined  from  sales  in  violation  of  the  cove- 
nants, but  enjoined  from  any  disposition  of 
them  whatever,  or  of  the  timber  thereof,  and 
from  cutting  or  authorizing  the  cutting  or 
removal  of  any  of  the  timber  thereon,  until 


8 

Congress  shall  have  a  reasonable  opportunity 
to  provide  by  legislation  for  their  disposition  in 
accordance  with  such  policy  as  it  may  deem 
fitting  under  the  circumstances,  and  at  the 
same  time  secure  to  the  defendants  all  the 
value  the  granting  acts  conferred  upon  the 
railroads." 

"If  Congress  does  not  make  such  provision 
the  defendants  may  apply  to  the  District  Court 
within  a  reasonable  time,  not  less  than  six 
months,  from  the  entry  of  the  decree  herein  for 
a  modification  of  so  much  of  the  injunction 
herein  ordered  as  enjoins  any  disposition  of 
the  lands  and  timber  until  Congress  shall  act, 
and  the  Court  in  its  discretion  may  modify 
the  decree  accordingly." 

The  decree  of  the  District  Court  enjoins  the 
railroad  company  from  sales  of  the  granted  lands 
in  violation  of  the  covenants — a  general  and  per- 
manent injunction,  so  far  forth  in  pursuance  of 
the  mandate,  but  as  to  the  timber  and  minerals  of 
the  granted  lands,  the  decree  is  not  limited  to  the 
scope  of  a  temporary  restraining  order  as  required 
by  the  opinion  of  this  court.  It  goes  farther,  it 
forbids  the  exercise  by  the  grantee  at  any  time  of  any 
right  of  ownership  in  respect  to  the  timber  or  mine- 
rals of  its  land.  It  denies  to  the  owner  of  the  land  any 
use  or  benefit  of  the  timber  or  the  minerals;  it 
accords  a  bare  permission  to  transfer  the  timber 
and  the  minerals  along  with  the  land,  when  a  sale  is 
made  of  that  land  to  a   settler  pursuant  to  the 


proviso.  But  such  a  transfer  of  timber  and  min- 
erals would  not  need  a  decree;  it  goes  without  say- 
ing; the  unsevered  timber  as  such,  the  unextracted 
mineral,  is  part  of  the  realty.  In  effect,  therefore, 
and  not  temporarily  but  for  good  and  all,  this 
decree  obliterates  all  rights  of  the  owner  of  a  "com- 
plete and  absolute  grant",  in  the  timber  and  min- 
erals of  the  granted  land. 

The  decree,  however,  is  not  the  last  word.  On 
June  9,  1916,  Congress  passed  the  Ferris  Act,  for- 
feiting the  railroad's  title  to  the  granted  lands.  It 
is  true,  the  harsh  word,  "forfeited,"  is  not  em- 
ployed; "revested"  is  the  term  used;  "the  title"  is 
declared  to  be  "revested  in  the  United  States". 
(Sec.  1)  Even  "a  mere  naked  trust  or  power  to  dis- 
pose of  the  lands  in  the  manner  specified  (in  the 
granting  act)  and  to  apply  the  same  to  the  use  and 
purpose  therein  described",  (Rice  against  Railroad 
Company,  1  Black  358,  381)  is  denied  the  railroad. 

The  revested  grantor  attends  to  all  that,  and  in 
its  own  way.  It  sells  the  timber  as  such;  (Sec.  4) 
it  disposes  of  the  minerals  as  such;  (Sec.  3)  and  to 
the  extent  that  the  land,  cleared  of  its  timber  or 
exploited  of  its  minerals,  has  become  susceptible  of 
agricultural  treatment,  it  proposes  to  sell  it  to 
settlers.  (Sec.  5)  For  the  grantee  who  built  the 
road  and  earned  the  land  and  received  the  patents 
for  it,  and  upon  whom  the  granting  act  imposes  the 
perpetual  burden  of  transporting  the  grantor's 
troops  and  property,  free  of  toll,  a  shadowy  provi- 


10 

sion  is  reserved.  It  is  to  receive  from  its  grantor  a 
sum  of  money  for  its  divested  title,  figured  at  $2.50 
per  acre  of  the  granted  lands,  patented  and  un- 
patented, but  after  deductions  and  on  time.  (Sees. 
7-10)  The  deductions  include  "all  receipts  of  money 
from  sales  of  land  or  timber,  forfeited  con- 
tracts, rent,  timber  depredations,  and  interest  on 
contracts,  or  from  any  other  source  relating  to 
said  lands,  also  the  value  of  timber  taken  from  said 
lands  and  used  by  said  grantees,  or  their  successor 
or  successors" ;  also  "the  amount  of  the  taxes  on  said 
lands  paid  by  the  United  States,  as  provided  in  this 
act,  and  which  should  in  law  have  been  paid  by  the 
said  Oregon  and  California  Railroad  Company." 
(Sec.  7)  The  balance,  if  any,  surviving  this  pro- 
cess, is  payable  on  time,  out  of  such  moneys  as  may 
be  "received  from  or  on  account  of  said  lands  and 
timber  under  the  provisions  of  this  act".  (Sec.  10) 
This  legislative  decree  does  not  contemplate  a  pres- 
ent payment  for  the  enforced  resumption  of  title. 
The  railroad  company  must  bide  its  time  and  for 
years.  "Payments  shall  be  made  from  time  to 
time",  it  is  declared,  "as  the  fund  accumulates,  by 
the  Treasurer  of  the  United  States,  upon  the  order 
of  the  Secretary  of  the  Interior:  provided,  however, 
that  if,  upon  the  expiration  of  ten  years  from  the 
approval  of  this  act,  the  proceeds  derived  from  the 
sale  of  lands  and  timber  are  not  sufficient  to  pay 
the  full  amount  which  said  railroad  company,  its 
successors  or  assigns,  are  entitled  to  receive,  the 


11 

balance  due  shall  be  paid  from  the  general  funds  in 
the  Treasury  of  the  United  States".    (Sec.  10.) 

The  six  months  period,  fixed  by  the  temporary  re- 
straining order  of  this  court,  has  now  only  an 
academic  interest.  It  expired  long  since.  The  stress 
of  the  second  decree  of  the  District  Court  of  Ore- 
gon is  on  the  timber  rights  and  mineral  rights  of 
the  grantee.  It  extinguishes  them.  But  whether 
it  went  beyond  the  mandate  of  this  court  and  the 
right  of  the  matter  in  so  doing,  becomes  a' mere  moot 
question,  an  abstract  proposition,  if  it  was  compe- 
tent to  Congress  by  the  Ferris  Act,  to  resume  the 
title  to  the  land  without  the  consent  of  its  owner. 

"The  duty  of  this  court",  it  was  said  in  Mills 
against  Green,  159  U.  S.,  651-653,  "as  of  every 
other  judicial  tribunal,  is  to  decide  actual  contro- 
versies by  a  judgment  which  can  be  carried  into 
effect,  and  not  to  give  opinions  upon  moot  questions 
or  abstract  propositions,  or  to  declare  principles  or 
rules  of  law  which  cannot  affect  the  matter  in  issue 
in  the  case  before  it.  It  necessarily  follows  that 
when,  pending  an  appeal  from  the  judgment  of  a 
lower  court,  and  without  any  fault  of  the  defend- 
ant, an  event  occurs  which  renders  it  impossible  for 
this  court,  if  it  should  decide  the  case  in  favor  of 
the  plaintiff,  to  grant  him  any  effectual  relief  what- 
ever, the  court  will  not  proceed  to  a  formal  judg- 
ment, but  will  dismiss  the  appeal.  And  such  a 
fact,  when  not  appearing  on  the  record,  may  be 
proved  by  extrinsic  evidence.     Lord  v.  Veazie,  8 


12 

How.  251;  California  v.  San  Pablo  &  Tulare  Rail- 
road, 149  U.  S.,  308".  (See  also  Campbell  v.  Cali- 
fornia, 200  U.  S.,  87,  90-93 ;  United  States  v.  Ham- 
burg American  Company,  239  U.  S.,  466,  475-6.) 

This  court  will  now  determine,  it  is  believed, 
"whether  the  enactment  of  the  subsequent  statute", — 
(Campbell  v.  California,  supra.)  of  the  Ferris  Act, 
in  the  case  at  bar,  was  a  constitutional  exercise 
of  the  power  of  Congress.  "If  the  act  be  invalid", 
said  the  Government  in  its  application  for  certiorari 
in  this  case,  "that  fact  should  be  known  before  fur- 
ther important  steps  are  taken  in  its  administration, 
before  sales  are  made  or  settlements  allowed  and 
the  money  of  purchasers  and  settlers  is  accepted, 
before  large  additional  expenditures  of  public  money 
are  incurred  in  the  payment  of  taxes  or  in  work  of 
investigation,  and  before  the  institution  of  the  new 
legal  proceedings  which  the  act  directs". 

ASSIGNMENT  OF  ERRORS. 

Errors  have  been  assigned  to  the  decree  below 
on  the  part  of  the  Oregon  and  California  Railroad 
Company,  on  the  part  of  the  Southern  Pacific  Com- 
pany, on  the  part  of  Stephen  T.  Gage,  individually 
and  as  trustee,  and  on  the  part  of  the  Union  Trust 
Company,  individually  and  as  trustee. 

The  assignments  of  error  for  these  four  appel- 
lants are,  it  will  be  readily  understood,  substantially 
identical.  It  would  serve  no  useful  purpose  to  re- 
peat these  assignments  at  this  point,  in  view  of  the 


13 

argument  which  follows,  and  in  which  they  are 
gathered  up.  It  will  only  be  necessary  to  say,  we 
venture  to  think,  that  they  all  turn,  with  more  or 
less  particularity  and  variation  of  form  and  ex- 
pression, on  the  fundamental  contention  that  the 
District  Court  erred  in  exceeding  the  mandate  of 
this  court.  The  further  contention  now  comes  in, 
that  the  action  of  the  District  Court  does  not  raise 
a  mere  moot  question,  and  this  for  the  reason  that 
the  Ferris  Act  is  invalid.  The  District  Court,  it 
may  be  added,  adjudged  costs  in  the  sum  of  $6,249.- 
02  against  these  appellants,  and  to  its  action  in  that 
regard  error  is  assigned. 

I. 

THE   DISTRICT    COURT   ERRED    IN   EXCEEDING    THE 
MANDATE   OF   THIS   COURT. 

Decree  of  the  District  Court — its  terms  and  scope 
examined  in  the  light  of  the  opinion  of  this  court. 

The  contention  of  the  government  that  the  set- 
tlers' clause  is  a  condition  subsequent,  entailing  a 
forfeiture  for  its  breach,  was  rejected  by  this  court. 
The  cross-complainants,  alleging  themselves  to  be 
"actual"  settlers  upon  the  land,  and  the  interveners, 
alleging  themselves  to  be  "constructive"  settlers 
upon  the  land,  made  the  contention  that  they  had 
rights  in  the  land  as  beneficiaries  of  a  trust  which 
the  railroad  company,  as  trustee,  should  be  con- 
strained to  execute — that  contention  was  rejected. 
The  settlers'  provisos  were  held  to  be  covenants, 


14 

enforceable  by  an  injunction  against  future  viola- 
tions of  the  same.  We  give  the  words  of  the  opinion, 
238  U.  S.,  at  page  436:  "Rejecting,  then,  the  con- 
tention of  the  government,  and  the  contentions  of 
the  cross-complainants  and  interveners,  and  regard- 
ing the  settlers'  clauses  as  enforceable  covenants, 
what  shall  be  the  judgment?  A  reversal  of  the 
decree  of  the  District  Court,  of  course;  and  clearly 
an  injunction  against  further  violations  of  the  cove- 
nants." 

That  the  injunction  contemplated  was  in  the 
nature  of  a  restriction  upon  the  future  conduct  of 
the  railroad  company,  is  again  brought  out  at  the 
same  page  of  the  opinion.  The  court  is  referring  to 
the  disregard  of  the  covenants,  to  the  gains  received 
by  the  company  in  excess  of  the  legal  or  statutory 
price  as  fixed  by  the  settlers'  clause,  and  it  goes 
on  to  say:  "In  view  of  such  disregard  of  the  cove- 
nants and  gain  of  illegal  emolument,  and  in  view  of 
the  government's  interest  in  the  exact  observance 
of  them,  it  might  seem  that  restriction  upon  the 
future  conduct  of  the  railroad  company  and  its 
various  agencies  is  imperfect  relief;  but  the  govern- 
ment has  not  asked  for  more." 

And  again,  at  page  437  of  the  opinion,  the  court 
says:  "However,  an  injunction  simply  against 
future  violations  of  the  covenants,  or  to  put  it  an- 
other way,  simply  mandatory  of  their  requirements, 
will  not  afford  the  measure  of  relief  to  which  the 
facts  of  the  case  entitle  the  government." 


15 

It  is  not  to  be  assumed,  however,  for  a  moment, 
that  the  court,  in  holding  the  provisos  to  be  cove- 
nants, enforceable  by  injunction  and  that  an  in- 
junction should  go  against  future  violations  of  them, 
decided,  or  meant  to  decide,  that  these  covenants 
were  directive  to  the  grantee  or  imposed  any  obliga- 
tion upon  it  to  make  sales  of  the  lands,  or  were 
other  than  restrictive  in  character — restrictive,  in 
the  sense  that  if  the  railroad  company  exercised  its 
option  to  make  sales  of  the  granted  land,  it  was  re- 
stricted in  such  sales,  so  far  as  purchasers  were  con- 
cerned, to  actual  settlers;  so  far  as  quantities  were 
concerned,  to  a  maximum  of  160  acres  to  each  pur- 
chaser; and  so  far  as  price  was  concerned,  to  a 
maximum  of  $2.50  an  acre.  An  injunction,  enforc- 
ing the  covenants  to  the  extent  and  by  the  measure 
of  these  restrictions,  was  the  injunction  which  the 
court  had  in  mind. 

To  illustrate:  The  court,  at  pages  417-418  of 
the  opinion,  is  meeting  the  argument  of  the  govern- 
ment that  the  railroad  company  had  made  a  breach 
of  the  provisos  and  was  amenable  to  a  forfeiture. 
"In  its  argument  at  bar,"  says  the  court,  "the 
government  insisted  that  it  was  the  duty  of  the  rail- 
road company  to  have  provided  the  machinery  for 
settlement,  and,  by  optional  sales,  guarded  by  pro- 
bational  occupation  of  the  lands,  to  demonstrate 
not  only  initial,  but  the  continued,  good  faith  of 
settlers ;  and  that  the  omission  to  do  so  was  of  itself 
a  breach  of  the  provisos,  and  incurred  a  forfeiture 


16 

of  the  grants.  "But  when",  the  court  continues, 
"did  such  obligation  attach?  Before  or  after  the 
construction  of  the  road — construction  in  sections, 
or  completely?  The  contention  encounters  the 
government's  admission  that  there  was  no  obliga- 
tion imposed  upon  the  railroad  to  sell.  And  we  have 
the  curious  situation — which  is  made  something  of 
by  cross-complainants  and  interveners  in  opposition 
to  the  government's  contention, — of  the  right  of 
settlers  to  buy,  but  no  obligation  on  the  railroad  to 
sell,  and  yet  a  duty  of  providing  for  sales  under  an 
extreme  and  drastic  penalty.  We  may  repeat  the 
question,  Might  not  such  consequences  have  ended 
the  enterprise,  making  it  and  its  great  purpose 
subordinate  to  local  settlement?  Indeed,  might  not 
both  have  been  defeated  by  the  inversion  of  their 
purposes." 

The  court  rejects,  as  well,  an  argument  made  for 
the  grantee  that  the  covenants,  expressed  by  the 
provisos,  were  not  enforceable  because  of  their  lack 
of  certainty,  repugnancy  to  the  grant,  and  impossi- 
bility of  performance.  The  court  saw,  in  the  sales 
made  in  earlier  years  to  settlers  of  some  hundred 
and  sixty-three  thousand  acres  of  the  granted  land, 
a  demonstration  so  far  forth  of  the  certainty  and 
practicability  of  the  provisos;  and  it  went  on  to 
show  that,  while  these  provisos  imposed  no  affirma- 
tive duty  upon  the  railroad  company  to  make  sales, 
yet  when  sales  were  in  point  of  fact  made,  it  was 
the  duty  of  the  railroad  company  to  make  those 


17 

sales  within  the  limitations  and  prohibitions  of  the 
covenant.  After  referring  to  the  example  of  these 
early  sales  to  settlers,  the  court  says,  at  pages  421-2 
of  the  opinion,  "The  demonstration  of  the  example 
would  seem  to  need  no  addition.  But  passing  the 
example,  as  it  may  be  contended  to  have  some  ex- 
planation in  the  character  of  the  lands  so  disposed 
of,  the  deduction  from  the  asserted  uncertainties  is 
met  and  overcome  by  the  provisos  and  their  explicit 
direction.  They  are,  it  is  true,  cast  in  language  of 
limitation  and  prohibition;  the  sales  are  to  be  made 
only  to  certain  persons  and  not  exceeding  a  specified 
maximum  in  quantities  and  prices.  If  the  lan- 
guage may  be  said  not  to  impose  'an  affirmative 
obligation  to  people  the  country'  it  certainly  im- 
poses an  obligation  not  to  violate  the  limitations 
and  prohibitions  when  sales  were  made;  and  it  is 
the  concession  of  one  of  the  briefs  that  the  obliga- 
tion is  enforceable,  and  that,  even  regarding  the 
covenant  as  restrictive,  the  'jurisdiction  of  a  court 
of  equity  upon  a  breach  or  threatened  breach  of  the 
covenant,  to  enforce  performance  by  enjoining  a 
violation  of  the  covenant  cannot  be  doubted.'  Appo- 
site cases  are  cited  to  sustain  the  admission,  and 
in  answer  to  the  contention  of  the  government  that 
it  could  recover  no  damages  for  the  breach  and 
hence  had  no  enforceable  remedy  but  forfeiture,  it 
is  said:  'But  the  jurisdiction  of  a  court  of  equity  in 
such  cases  does  not  depend  upon  the  showing  of 
damage.     Indeed,  the  very  fact  that  injury  is  of 


18 

public  character  and  such  that  no  damage  could  be 
calculated  is  an  added  reason  for  the  intervention 
of  equity.'    And  cases  are  adduced." 

The  opinion  now  proceeds:  "We  concur  in  the 
reasoning,  and  give  it  greater  breadth  in  the  case 
at  bar  than  counsel  do.  They  would  confine  it,  or 
seem  to  do  so,  to  the  compulsion  of  sales  of  land 
susceptible  of  actual  settlement,  and  assert  that  the 
evidence  established  that  not  all  of  the  lands,  nor 
indeed  the  greater  part  of  them,  have  such  suscepti- 
bility. But  neither  the  provisos  nor  the  other  parts 
of  the  granting  acts  make  a  distinction  between  the 
lands,  and  we  are  unable  to  do  so.  The  language 
of  the  grants  and  of  the  limitations  upon  them  is 
general.  We  cannot  attach  exceptions  to  it.  The 
evil  of  an  attempt  is  manifest.  The  grants  must  be 
taken  as  they  were  given.  Assent  to  them  was  re- 
quired and  made,  and  we  cannot  import  a  different 
measure  of  the  requirement  and  the  assent  than  the 
language  of  the  act  expresses.  It  is  to  be  remem- 
bered that  the  acts  are  laws  as  well  as  grants  and 
must  be  given  the  exactness  of  laws." 

Again,  at  page  428,  the  court  says:  "The  char- 
acter of  the  lands  furnished  no  excuse.  It  might 
have  justified  non-action,  but  it  did  not  justify 
antagonistic  action." 

Again,  at  page  432,  the  court  can  see  no  merit  in 
the  claim  of  the  interveners,  who  were  mere  con- 
structive or  potential  settlers,  under  a  statute  deal- 
ing with  actual  settlers.     "The  word  'actual/  "  the 


19 

court  says,  "expresses  a  settlement  completed,  not 
simply  contemplated  or  possible.  Upon  the  express 
words  of  the  provisos,  it  would  seem  that  inter- 
veners' claims  to  be  beneficiaries  of  the  trust,  if 
there  is  a  trust,  must  be  refuted."  But  as  to  the 
cross-complainants,  alleging  themselves  to  be  actual 
settlers,  the  argument,  under  a  statute  dealing  with 
actual  settlers  eo  nomine,  is  more  difficult,  and  the 
considerations  are  more  appealing;  and  this  leads 
the  court  to  re-affirm  its  interpretation  that  these 
provisos  are  restrictive  merely,  not  directive. 

Said  the  court  (p.  432)  :  "The  cross-complainants 
present  arguments  of  more  difficulty,  supported  by 
appealing  considerations.  'Actual  settlers'  are  the 
words  of  the  provisos,  and  we  may  assume  actual 
settlers  were  contemplated,  and  sales  of  the  lands 
were  restricted  to  them;  but  how  were  actual  set- 
tlers to  be  ascertained  and  by  whom?  And  was 
there  a  compulsion  or  option  as  to  sales?  There 
could  not  be  an  absolute  right  to  settle  or  purchase 
unless  there  was  an  absolute  compulsion  to  sell. 
The  acts  of  Congress  omit  regulation.  Their  lan- 
guage is  not  directive;  it  is  restrictive  only.  With 
this  exception,  the  grant  is  unqualified'1  But  the 
court  says  further  (pp.  432-3) :  "There  is  plausi- 
bility in  the  argument  which  represents  that  if 
the  provisos  be  held  to  give  to  the  railroad  a  discre- 
tion of  sale,  the  choice  of  time  and  settlers,  their  re- 
quirement is  impotent,  and  instead  of  securing 
settlement  would  prevent  it;  instead  of  devoting 


20 

the  lands  to  development,  retain  them  in  monopoly 
and  a  kind  of  mortmain." 

"We  feel  the  strength  of  the  argument  but  can- 
not yield  to  it.  There  are  countervailing  ones.  We 
have  already  indicated  that  nothing  can  be  deduced 
from  the  imperfections  of  the  granting  acts.  In- 
deed, the  argument  of  cross-complainants,  like  a 
great  many  other  contentions  in  the  case,  get  their 
plausibility  from  the  abuses  of  the  granting  acts, 
not  their  uses.  We  have  seen  that  in  the  early  days 
of  the  grants,  settlements  were  normally  made  and 
the  railroad,  in  the  exercise  of  its  discretion,  re- 
sponded to  such  settlement  by  sales  to  settlers." 

Again,  pointing  to  the  withdrawal  of  the  granted 
lands  from  the  operation  of  the  public  land  laws  and 
to  the  resulting  differentiations,  the  court  says  (p. 
434) :  "The  public  land  laws  had  tests  of  the  quali- 
fication of  settlers  under  them;  they  had  also  the 
machinery  of  proof  and  precaution.  When  the 
granted  lands  were  withdrawn  from  those  laws  and 
primarily  devoted  to  another  purpose,  they  were 
committed  to  another  power,  to  be  administered  for 
such  purpose ;  and  a  discretion  in  the  exercise  of  the 
power,  within  the  restriction  imposed,  was  neces- 
sarily conferred." 

And  finally,  at  pages  434-5  of  the  opinion,  the 
court  says:  "There  was  a  complete  and  absolute 
grant  to  the  railroad  with  power  to  sell,  limited 
only  as  prescribed,  and  we  agree  with  the  govern- 
ment that  the  company  'might  choose  the  actual 


21 

settler;  might  sell  for  any  price  not  exceeding  $2.50 
an  acre;  might  sell  in  quantities  of  40,  60  or  100 
acres,  or  any  amount  not  exceeding  160  acres/ 
And  we  add,  it  might  choose  the  time  for  selling,  or 
its  use  of  the  grants  as  a  means  of  credit,  subject 
ultimately  to  the  restrictions  imposed". 

It  is  abundantly  clear  from  the  decision  of  this 
court,  that  the  language  of  these  provisos  "is  not 
directive,  it  is  restrictive  only;"  and  that  the  obli- 
gation imposed  upon  the  company  is  "an  obligation 
not  to  violate  the  limitations  and  prohibitions  when 
sales  were  made."  The  absolute  grant  to  the  rail- 
road company  carried  the  "power  to  sell,  limited 
only  as  prescribed."  The  company,  as  the  govern- 
ment itself  argued,  and  as  the  court  agreed,  "might 
choose  the  actual  settler,  might  sell  for  any  price 
not  exceeding  $2.50  an  acre,  might  sell  in  quanti- 
ties of  40,  60  or  100  acres,  or  any  amount  not  ex- 
ceeding 160  acres;"  and  more  than  that,  as  the 
court  explicitly  held,  "it  might  choose  the  time  for 
selling." 

There  can  be  no  misunderstanding  of  the  position 
of  the  court  as  to  whether  there  was  "a  compulsion 
or  option  as  to  the  sales."  The  same  thought  was 
expressed  in  Nichols  v.  Southern  Oregon  Co.,  135 
Fed.,  233,  where  the  Court  said,  speaking  of  a  simi- 
lar provision : 

"The  grant  was  not  a  law  for  the  sale  of  the 
granted  lands.  It  did  not  offer  them  for  sale. 
That  was  left  to  the  state,   (the  grant  being 


22 

to  the  state  directly)  subject  to  restrictions  as 
to  the  price  at  which  they  should  be  sold  and 
the  quantity  that  should  be  sold  to  any  one 
person.  These  restrictions  were  mere  inci- 
dents of  the  grant,  mere  regulations  that  the 
state  was  required  to  observe  in  selling  the 
granted  lands,  at  such  time  after  they  were 
earned  as  the  state  should  conclude  to  sell  them." 

And  in  the  Government's  brief  on  demurrer  to 
the  bill,  in  the  case  at  bar,  it  was  said,  at  page  154: 

"The  terms  of  this  proviso  are  prohibitive 
and  not  compulsory;  that  is,  it  prohibits  sales 
except  within  the  maximum  limits  imposed. 
Each  of  the  limitations  is  in  the  negative  form 
— 'actual  settlers',  quantities  'not  greater', 
prices  'not  exceeding'." 

And  at  page  226  of  the  same  brief  the  Gov- 
ernment says: 

"In  the  case  at  bar  observance  of  the  condi- 
tion would  consist  in  refraining  from  making 
sales  to  others  than  actual  settlers,  in  quanti- 
ties exceeding  160  acres  to  any  one  purchaser 
for  a  price  exceeding  $2.50  an  acre.  The  thing 
prohibited  was  specifically  stated  in  language 
which  is  not  susceptible  of  any  doubt  or  un- 
certainty." 

An  injunction,  therefore,  "against  future  viola- 
tions of  the  covenants,"  as  decreed  by  the  court,  once 
the  covenants,  as  construed  by  the  court,  are  un- 
derstood, is  not  difficult  to  appreciate.     It  does  not 


23 

import  or  imply  a  direction  to  the  company  to  make 
sales,  for  the  covenants  were  not  directive.  It  does 
import  a  restriction  upon  the  company,  for  the  cov- 
enants were  restrictive.  It  subjects  the  grantee 
to  a  restriction,  "when  sales  were  made,"  made 
not  under  "compulsion"  but  at  the  "option"  and 
in  the  "discretion"  of  the  grantee,  that  such  sales 
should  not  violate  the  limitations  and  prohibitions 
of  the  provisos — that  they  should  not  be  made 
except  to  actual  settlers,  that  they  should  not  be 
made  in  quantities  to  exceed  160  acres,  and  that 
they  should  not  be  made  at  prices  in  excess  of  $2.50 
an  acre.  A  decree  for  such  an  injunction,  would  be 
a  decree  in  accordance  with  the  opinion  of  the  court. 

One  thing,  however,  was  quite  clear  to  the  court — 
that  the  settlers'  clause  was  a  settlement  clause; 
that  it  was  not  passed  for  the  benefit  of  timber 
speculators.  The  restriction  on  the  railroad  com- 
pany, in  making  sales  of  forest  land  insusceptible 
of  settlement,  and  chiefly  valuable  for  timber,  at  a 
maximum  price  of  $2.50  an  acre,  would  be  virtually 
an  invitation  to  the  timber  speculator,  under  the 
guise  of  a  settler;  the  railroad  company  would  be 
limited  to  that  constituency  for  its  purchasers;  and 
the  Congressional  policy  and  intent  would  be  de- 
feated. Some  measure  of  relief  the  government — 
and  as  well  the  grantee — was  entitled  to,  appropri- 
ate to  that  situation. 

The  decree  of  this  court  vindicates  the  title  of 
the  grantee  in  explicit  and  emphatic  terms.      But 


24 

it  seems  to  have  been  conceived  by  the  court,  on  a 
view  of  the  whole  case,  that  the  temporary  restrain- 
ing order,  keeping  the  subject  matter  in  statu  quo, 
was  an  equitable  condition  to  annex  to  its  decree,  in 
aid  of  such  amendatory  legislation,  competent  to 
Congress,  as,  consistently  with  the  rights  of  the 
grantee,  might  afford  relief  from  unworkable  re- 
quirements. 

"The  Court"  said  Chief  Justice  Marshall,  in  Polk 
v.  Wendall,  9  Cranch,  87,  99,  "may,  on  a  view  of 
the  whole  case,  annex  equitable  conditions  to  its 
decree,  or  order  what  may  be  reasonable,  without 
absolutely  avoiding  a  whole  grant". 

The  court  makes  no  suggestion  as  to  the  char- 
acter of  this  amendatory  legislation,  except  that  it 
is  careful  to  say  that  any  action  by  Congress  in  the 
premises  must  "secure  to  the  defendants  all  the 
value  the  granting  acts  conferred  upon  the  rail- 
roads." It  will  be  convenient  and  aidful  to  quote 
the  language  of  the  opinion  at  pages  437-9: 

"The  Government  alleged  in  its  bill  that 
more  than  1000  persons  had  made  application 
to  purchase  from  the  railroad  company  in 
conformity  to  the  covenants.  In  answering, 
the  defendants  averred  that  such  applications 
were  made  by  persons  who  desired  to  obtain 
title  on  account  of  the  timber  and  not  other- 
wise, and  for  the  purpose  of  speculation  only 
and  not  in  good  faith  as  actual  settlers.  And 
it  was  averred  that  the  lands  were  chiefly  and 
in  most  instances  solely  of  value  because  of  the 


25 


timber  thereon  and  were  not  fit  for  actual  set- 
tlement. And,  further,  that  the  lands  capable 
of  actual  settlement  and  the  establishment  of 
homes  thereon  at  no  time  'exceeded  (approxi- 
mately) 300,000  acres,  consisting  of  small  and 
widely  separated  tracts,  all  of  which  were  sold 
to  actual  settlers  or  persons  claiming  to  be 
such  during  construction  and  prior  to  comple- 
tion, respectively,  of  said  railroads,  in  quan- 
tities of  160  acres  or  less  to  a  single  purchaser, 
at  prices  not  exceeding  $2.50  per  acre/ 

"A  great  deal  of  testimony  was  introduced, 
consisting  not  only  of  that  of  witnesses  but  of 
maps,  photographs,  reports  and  publications, 
which  tended  to  establish  the  asserted  character 
of  the  lands.  And  there  was  evidence  in  re- 
buttal. We  cannot  pause  to  determine  the 
relative  probative  force  of  the  opposing  testi- 
monies. It  is,  however,  clear,  even  from  the 
Government's  summary  of  the  evidence,  that 
lands  which  may  be  fit  for  cultivation  have  a 
greater  value  on  account  of  the  timber  which 
is  upon  them.  Besides,  for  our  present  pur- 
pose we  may  accept  the  assertion  of  defend- 
ants; and  we  have  seen  that  Congress  extended 
the  Timber  and  Stone  Act  to  the  reserved  lands, 
and  by  the  act  of  August  20,  1912,  supra,  it 
has  withdrawn  from  entry  or  the  initiation  of 
any  right  whatever  under  any  of  the  public 
land  laws  of  the  United  States  the  lands  which 
might  revert  to  the  United  States  by  reason 
of  this  suit. 

"This,  then,  being  the  situation  resulting 
from  conditions  now  existing,  incident,  it  may 


26 

be,  to  the  prolonged  disregard  of  the  covenants 
by  the  railroad  company,  the  lands  invite  now 
more  to  speculation  than  to  settlement,  and  we 
think,  therefore,  that  the  railroad  company 
should  not  only  be  enjoined  from  sales  in  vio- 
lation of  the  covenants,  but  enjoined  from  any 
disposition  of  them  whatever  or  of  the  timber 
thereon  and  from  cutting  or  authorizing  the 
cutting  or  removal  of  any  of  the  timber  there- 
on, until  Congress  shall  have  a  reasonable  op- 
portunity to  provide  by  legislation  for  their 
disposition  in  accordance  with  such  policy  as 
it  may  deem  fitting  under  the  circumstances 
and  at  the  same  time  secure  to  the  defendants 
all  the  value  the  granting  acts  conferred  upon 
the  railroads. 

"If  Congress  does  not  make  such  provision  the 
defendants  may  apply  to  the  District  Court 
within  a  reasonable  time,  not  less  than  six 
months,  from  the  entry  of  the  decree  herein, 
for  a  modification  of  so  much  of  the  injunc- 
tion herein  ordered  as  enjoins  any  disposition 
of  the  lands  and  timber  until  Congress  shall 
act,  and  the  court  in  its  discretion  may  modify 
the  decree  accordingly. 

^Decree  reversed  and  cause  remanded  to  the 
District  Court  for  further  proceedings  in  ac- 
cordance with  this  opinion." 

It  will  be  seen,  therefore,  that  the  opinion  of  the 
Court  contemplates  as  well  a  secondary  and  tem- 
porary injunction  as  a  general  and  permanent  in- 
junction. The  general  and  permanent  injunction  is 
against  future  violations  of  the  covenants  as  we  now 


27 

know  those  covenants  to  be,  in  their  scope  and  ef- 
fect, as  understood  by  the  court.  The  secondary 
and  temporary  injunction  it  is,  and  that  only,  which 
has  reference  to  the  timber.  Its  obvious  purpose 
is  to  maintain  the  status  quo,  so  far  as  these  lands 
and  the  timber  upon  them  are  concerned,  for  a  lim- 
ited period,  until  some  adjustment,  remediable  of 
the  anomaly  that  valuable  timber  lands  should  be 
salable  at  $2.50  an  acre,  can  be  accomplished. 
Whatever  adjustment  may  be  made,  it  must  be  con- 
sistent with  the  vested  rights  of  the  railroad  com- 
pany. No  legislation  by  Congress  providing  for 
the  disposition  of  these  lands,  and  that  by  their  owner, 
the  railroad  company,  is  within  the  mind  of  the 
court,  except  such  as  is  consistent  with  the  vested 
rights  of  the  railroad  company — such  as  shall  "se- 
cure to  the  defendants  all  the  value  the  granting 
acts  conferred  upon  the  railroads.''  It  is  not  con- 
templated, it  could  not  have  been,  that  Congress 
should  provide  for  a  disposition  of  those  lands  by 
Congress  itself,  or  by  anybody  else  who  did  not  own 
the  lands.  The  effort  of  the  government  in  this 
litigation  to  disestablish  the  ownership  of  the  rail- 
road company,  to  enforce  a  forfeiture,  to  revest  the 
title  in  the  United  States,  had  failed.  That  con- 
tention had  been  definitely  rejected.  The  railroad 
ownership  had  been  vindicated  and  confirmed  over 
and  over  again,  but  the  owner  of  those  lands,  the 
railroad  company,  in  essaying  to  make  sales  of 
the  lands,  was  hedged  in  by  the  terms  of  a  re- 


28 

strictive  covenant,  enforceable  by  injunction — was 
limited,  in  the  disposition  of  these  lands,  to  sales  to 
actual  settlers,  in  small  parcels,  at  a  price  of  $2.50 
an  acre.  The  condition  of  the  subject  matter  of 
the  covenant — its  physical  and  its  economic  condi- 
tion— was  inconsistent  with  such  a  covenant,  the 
land  was  timber  land,  it  was  not  settlement  land,  it 
was  insusceptible  of  settlement,  and  its  value  was  in 
excess  of  $2.50  an  acre.  Some  relief  from  this  im- 
practicable covenant — some  feasible  and  equitable 
relaxation  of  its  strictness  in  the  way  of  an  amend- 
ment and  expansion  of  the  power  of  disposition  con- 
ferred upon  the  railroad  company — this  was  the 
problem  as  the  court  saw  it,  and  this  is  made  ap- 
parent if  we  turn  again  to  the  opinion  itself. 

If  these  covenants  were  unworkable,  the  course 
of  the  railroad  company,  as  the  court  viewed  it,  was 
not  to  ignore  or  disregard  them — they  were  a  con- 
tract and  a  law.  The  true  course  was  to  go  to 
Congress  for  some  amendatory  legislation  in  the 
way  of  relief  from  their  requirements.  The  judg- 
ment of  the  court  on  the  grant  and  on  these  cove- 
nants, it  was  said,  was  not  to  be  determined  by  sug- 
gestions ab  mconvenienti;  "It  is  determined,"  we 
give  the  language  of  the  opinion  "by  the  simple 
words  of  the  acts  of  Congress,  not  only  regarded 
as  grants  but  as  laws,  and  accepted  as  both ;  grant- 
ing rights  but  imposing  obligations — rights  quite 
definite,  obligations  as  much  so.  The  first  had  the 
means  of  acquisition;  the  second,  of  performance; 


29 

and,  as  we  have  pointed  out,  whatever  the  difficul- 
ties of  performance,  relief  could  have  been  applied 
for,  and,  it  might  be,  have  been  secured  through  an 
appeal  to  Congress.  Certainly,  evasion  of  the  laws 
or  the  defiance  of  them  should  not  be  resorted  to." 
And  taking  these  covenants  as  it  found  them,  the 
court  was  not  willing  to  enlarge  their  obligation  by 
the  wisdom  that  comes  after  the  event.  "Nor  can 
their  obligation,"  said  the  court,  "be  magnified  by 
looking  backwards,  by  the  results  achieved  rather 
than  when  they  were  only  hoped  for — by  condi- 
tions of  which  there  was  not  even  prophecy." 
(Opinion  p.  435). 

Again,  the  court  had  said,  at  page  428:  "The 
character  of  the  lands  furnished  no  excuse ;  it  might 
have  justified  non-action,  but  it  did  not  justify  an- 
tagonistic action."  And  more  at  large,  and  in- 
structively, the  court  says,  (pp.  422-3)  :  "If  the 
provisos  were  ignorantly  adopted  as  they  are  as- 
serted to  have  been;  if  the  actual  conditions  were 
unknown  as  is  asserted ;  if  but  little  of  the  land  was 
arable,  most  of  it  covered  with  timber  and  valuable 
only  for  timber  and  not  fit  for  the  acquisition  of 
homes;  if  a  great  deal  of  it  was  nothing  but  a 
wilderness  of  mountain  and  rock  and  forest;  if  its 
character  was  given  evidence  by  the  application  of 
the  Timber  &  Stone  Act  to  the  reserved  lands;  if 
settlers  neither  crowded  before  nor  crowded  after 
the  railroad,  nor  could  do  so ;  if  the  grants  were  not 
as  valuable  for  sale  or  credit  as  they  were  supposed 


30 

to  have  been,  and  difficulties  beset  both  uses,  the 
remedy  was  obvious.  Granting  the  obstacles  and  in- 
firmities, they  were  but  promptings  and  reasons  for 
an  appeal  to  Congress  to  relax  the  law;  they  were 
neither  cause  nor  justification  for  violating  it." 

A  decree,  then,  in  accordance  with  the  opinion  of 
this  court  would  be  injunctive  in  character,  and  of  a 
two-fold  aspect.  It  would,  in  the  first  place,  en- 
join the  railroad  company,  generally  and  per- 
manently, from  future  violations  of  these  restric- 
tive covenants.  It  would,  in  the  second  place,  and 
as  a  suspensive  measure,  hold  the  lands  in  statu  quo, 
for  a  limited  period,  until  some  relief  from  the 
strictness  of  disposition  required  by  covenants,  when 
seen  to  be  inapposite  to  the  subject  matter,  should 
be  afforded  by  Congress.  This  secondary  and  sus- 
pensive injunction  puts  the  sales  of  the  land,  al- 
though made  in  full  conformity  with  the  provisos, 
and  as  well  the  use  of  the  timber  by  the  com- 
pany, in  the  same  category.  Notwithstanding 
that  the  railroad  company  might  seek  to  dispose  of 
160  acres  of  this  land,  during  the  period  of  the 
suspensive  injunction,  to  an  actual  settler,  at  $2.50 
an  acre — pursuing  literally  the  terms  of  the  pro- 
viso— it  is  enjoined  ad  interim  from  doing  so;  and 
it  is  likewise  enjoined,  during  the  interim,  from  us- 
ing the  timber.  The  company's  clear  right  to  sell 
these  lands,  if  it  so  elects,  in  conformity  with  the 
provisos,  was  a  thing  conceded  of  everybody.     But 


31 

that  clear  right  is  put  in  abeyance  by  the  temporary 
injunction ;  and  similarly,  the  equally  clear  right  of 
the  owner  of  the  land  to  the  timber  growing  upon 
it,  is  put  in  abeyance  for  the  same  period  and  in 
the  same  way.  No  question  has  been  made  in  this 
case,  whether  in  printed  briefs  or  in  oral  discussion 
at  bar,  as  to  the  right  of  an  owner  by  absolute 
grant  to  the  use  of  the  timber  on  his  land.  No  such 
question  was  decided  in  the  opinion  of  the  court; 
no  such  question  was  stated  or  considered  or  dis- 
cussed in  that  opinion.  What  the  lower  court  was 
directed  to  do,  was  to  enter  an  injunctive  decree, 
restraining  the  railroad  company  from  future  vio- 
lations of  the  covenants,  as  those  covenants  had 
been  construed  by  the  Supreme  Court,  and,  further, 
by  secondary  and  temporary  injunction,  to  pre- 
serve the  status  quo  in  respect  to  the  lands  and  the 
timber  until  Congress  could  interpose  with  some 
relief  by  amendatory  legislation,  consistent  with  the 
vested  rights  of  the  owner  of  the  grant. 

The  District  Court,  it  is  to  be  said  with  great 
deference,  was  not  content  to  pursue  the  mandate 
of  the  Supreme  Court.  Its  decree  was  in  excess  of 
that  mandate.  It  was  what  this  court  has  termed 
an  "intermeddling"  with  matters  outside  the  scope 
of  the  mandate.  It  proceeded  to  determine  that  the 
railroad  company  had  no  right  to  use  the  timber 
upon  its  own  lands  while  they  were  still  unsold  and 
in  its  possession  and  occupancy;  it  determined  that 
the  railroad  company  could  not  even  make  a  clear- 


32 

ing  in  anticipation  of  a  sale  to  some  settler,  or  dig 
out  a  ton  of  coal ;  and  it  adjudged  that  the  owner  of 
the  land  had  no  right  in  the  timber  or  the  coal  ex- 
cept to  pass  it,  as  part  of  the  realty,  when  it  sold 
the  land  to  a  settler  at  $2.50  an  acre.  Two  de- 
crees were  presented  to  the  District  Court — the  one, 
by  the  government,  imposing  these  new  and  added 
features  upon  the  mandate  of  this  court,  and  this 
proposed  decree,  with  an  omission  not  material  here, 
was  adopted  by  the  District  Court;  the  other,  by 
these  appellants,  pursuing  the  very  terms  of  the 
mandate.  These  decrees  are  set  forth  in  the 
transcript  of  the  record,  and  are  printed  as  ap- 
pendices to  this  brief. 

We  should  now  look  at  these  decrees.  The  first 
paragraph  is  the  same  in  both  decrees.  It  provides 
that  the  original  decree  of  the  District  Court,  being 
the  decree  of  forfeiture,  "so  far  as  it  affects  the  de- 
fendants," naming  the  appellants,  "be,  and  the 
same  is  hereby  set  aside  and  held  for  naught,  but 
is  adhered  to  in  all  respects  as  to  the  defendants 
and  cross-complainants,  hereinafter  called  the 
'cross-complainants/  and  the  'interveners'."  The 
second  paragraph  of  the  decree  proposed  by  these 
appellants,  expresses  the  general  injunction,  or- 
dered by  the  Supreme  Court,  against  future  viola- 
tions by  the  railroad  company  of  the  covenants.  It 
is  in  these  words:  "that  the  said  defendants 
and  their  respective  officers  and  agents  be,  and 
each  is  hereby   enjoined,   from  selling   the   lands, 


33 

or  any  part  thereof,  granted  either  by  the  act  of 
Congress,  approved  July  25,  1866,  as  amended  by 
the  act  of  Congress  of  April  10,  1869,  or  by  the  act 
of  Congress  approved  May  4,  1870,  whether  the  said 
lands  be  situated  within  the  place  or  indemnity  lim- 
its of  the  grants  thereby  made,  to  any  person  not 
an  actual  settler,  or  in  quantities  greater  than  one- 
quarter  section  to  one  purchaser,  or  for  a  price 
exceeding  two  and  50/100  dollars  ($2.50)  per  acre." 
The  second  paragraph  of  the  decree,  as  signed 
by  the  District  Judge,  so  far  forth  as  its  first  clause, 
is — barring  the  fact  that  the  words  "on  the  land 
sold  to  him"  have  been  inserted  therein  after  the 
words  "actual  settler" — the  same,  word  for  word, 
as  the  paragraph  of  our  proposed  decree  which  has 
just  been  quoted.  But  the  government  added,  and 
the  District  Court  adopted,  a  second  and  further 
clause,  touching  the  timber  on  the  granted  lands — 
likewise  any  mineral  found  therein — and  this,  as 
part,  not  of  any  temporary  injunction,  but  of  the 
general  and  permanent  injunction, — enjoining  the 
owner  of  the  land  from  any  disposition  of  the 
timber,  and,  as  well,  of  any  mineral  deposits  therein, 
except  as  that  timber  or  those  deposits  went  along 
with  the  land  when  it  was  sold  within  the  limita- 
tions of  the  covenants,  as  indicated  in  the  first 
clause.  We  quote  this  second,  interpolated  clause: 
"and  from  selling  any  of  the  timber  on  said 
lands,  or  any  mineral  or  other  deposits  therein, 
except  as  a  part  of  and  in  conjunction  with  the 


34 

lands  on  which  the  timber  stands  or  in  which  the 
mineral  or  other  deposits  are  found,  and  from  cut- 
ting or  removing  or  authorizing  the  cutting  or  re- 
moval of  any  of  the  timber  thereon,  or  from  remov- 
ing or  authorizing  the  removal  of  mineral  or  other 
deposits  therein,  except  in  connection  with  the  sale 
of  the  land  bearing  the  timber  or  containing  the 
mineral  or  other  deposits."  This  decree,  it  will  be 
seen,  imports  bodily  into  the  general  injunction,  a 
provision  more  or  less  reflective  of  the  temporary 
restraint  which  the  mandate  imposes  in  aid  of  the 
maintenance  of  the  status  quo  pending  Congres- 
sional interposition.  It  is  a  gratuitous  enlargement 
and  exceeding  of  the  terms  of  the  mandate. 

Paragraph  3  of  our  proposed  decree,  pursues  in 
terms  the  mandate  of  the  Supreme  Court,  touching 
the  temporary  injunction.    We  quote  paragraph  3 : 

"That  the  said  defendants  and  their  re- 
spective officers  and  agents  be,  and  each  is 
hereby,  enjoined  from  any  disposition  of  the 
said  lands,  or  any  part  thereof,  or  of  the 
timber  thereon,  and  from  cutting,  or  authoriz- 
ing the  cutting,  or  removal  of  any  of  the  tim- 
ber thereon,  until  Congress  shall  have  a  rea- 
sonable opportunity  to  provide  by  legislation 
for  the  disposition  of  said  lands,  in  accordance 
with  such  policy  as  it  may  deem  fitting  under 
the  circumstances,  and  at  the  same  time  secure 
to  the  defendants  all  the  value  the  granting 
acts  conferred  upon  the  grantees;  but  if  Con- 
gress does  not  make  such  provision,  the  de- 


35 

fendants  may  apply  to  this  court,  within  a  rea- 
sonable time,  not  less  than  six  (6)  months  from 
the  entry  of  the  decree  herein,  for  a  modifica- 
tion of  so  much  of  the  injunction  herein  or- 
dered as  enjoins  any  disposition  of  the  lands 
and  timber  until  Congress  shall  act." 

This  parapraph  of  our  proposed  decree  will  bear 
comparison,  word  for  word,  with  the  language  of 
the  opinion  of  the  Supreme  Court. 

Paragraph  3  of  the  decree  as  signed  by  the 
District  Court,  like  our  paragraph  3,  is  ad- 
dressed to  the  temporary  injunction.  We  under- 
stand it  to  go  to  the  same  thing  as  our  proposed 
paragraph  3,  and  we  note  these  differences:  that 
the  decree  as  signed  takes  in,  as  well  mineral  or 
other  deposits  in  the  lands,  as  timber  thereon — and 
includes,  also,  moneys  which  have  arisen,  or  may 
hereafter  arise  from  sales  of  the  lands  or  of  the 
timber,  through  condemnation  proceedings  or  other- 
wise, when  impounded,  or  which  may  hereafter  be 
impounded,  in  custodia  legis  to  await  the  final  de- 
cision of  the  Supreme  Court.  No  reference  to  such 
moneys  was  made  in  our  proposed  decree  for  the 
reason  that  such  impounded  moneys  were  covered 
by  appropriate  orders  in  the  particular  litigation. 

Paragraph  4  of  the  decree  as  signed  is  a  mere 
continuation  of  the  subject  matter  of  paragraph  3, 
and  deals  with  the  right  of  defendants  to  apply  for 
a  modification  of  the  injunction  in  the  event  that 
Congress  should  fail  to  act. 


36 

Paragraph  5  of  the  decree  as  signed  includes,  as 
part  of  the  lands  covered  by  the  decree,  such  lands 
as  have  reverted  or  may  hereafter  revert  to  the  de- 
fendants— looking  more  to  such  lands  as  may  be 
embraced  by  executory  contracts  of  sale  on  which 
the  purchaser  has  suffered  or  may  suffer  default. 

And  paragraph  6  makes  the  decree  to  be  without 
prejudice  to  any  rights  of  the  government  under  the 
joint  resolution  of  Congress,  of  April  30,  1908,  be- 
ing the  resolution  authorizing  the  Attorney-General 
to  proceed  against  the  granted  lands;  or  under  the 
Act  of  Congress  of  August  20,  1912,  being  the 
statute  authorizing  the  compromise  of  suits  against 
purchasers  from  the  railroad  company.  This  need 
not  detain  us. 

The  seventh  paragraph  of  the  decree  as  signed 
awards  costs  against  the  appellants  and  in  favor 
of  the  complainant  to  the  amount  of  $6,249.02 ;  and 
we  shall  consider  these  costs  later. 

So  far,  then,  as  the  timber  and  the  minerals  are 
concerned,  the  difference  between  the  two  decrees — 
between  the  one  as  proposed  by  us  and  the  one 
signed — will  be  found  in  the  new  and  added  fea- 
tures in  excess  of  the  language  of  the  mandate,  im- 
ported by  the  decree  into  the  second  clause  of  the 
second  paragraph — by  which  the  defendants  are  en- 
joined not  only  from  selling  the  lands,  not  only  from 
future  violations  of  the  covenants,  but  also — and 
for  convenience  we  quote  again : 


37 

"from  selling  any  of  the  timber  on  said  lands, 
or  any  mineral  or  other  deposits  therein  except 
as  a  part  of  and  in  conjunction  with  the  land 
on  which  the  timber  stands  or  in  which  the 
mineral  or  other  deposits  are  found;  and  from 
cutting  or  removing  or  authorizing  the  cutting 
or  removal  of  any  of  the  timber  thereon,  or 
from  removing  or  authorizing  the  removal  of 
mineral  or  other  deposits  therein,  except  in  con- 
nection with  the  sale  of  the  land  bearing  the 
timber  or  containing  the  mineral  or  other  de- 
posits." 

Mr.  Justice  Lurton  of  the  Supreme  Court  of  the 
United  States,  was  a  member  of  the  Circuit  Court 
of  Appeals  which  decided  the  case  of  Bisseil  v. 
Goshen,  72  Fed.  545.  Judge  Lurton,  himself,  wrote 
the  opinion  in  that  case,  and  the  court,  speaking 
through  him,  said  (at  p.  548)  : 

"Whatever  was  before  it  (speaking  of  the 
Appellate  Court)  by  virtue  of  that  appeal,  and 
was  disposed  of,  has  been  finally  done,  and 
must  be  regarded  as  settled.  The  Circuit  Court 
is  bound  by  such  decree  as  the  law  of  the  case, 
and  must  carry  it  into  execution  according  to 
the  mandate.  The  decree  of  this  court  upon 
any  matter  within  its  jurisdiction  can  neither 
be  modified,  reversed,  enlarged,  nor  suspended 
by  the  Circuit  Court  nor  can  any  other  or  less 
or  greater  relief  be  accorded  than  that  pre- 
scribed by  its  decree  and  mandate. 

Judge  Lurton  goes  on  to  quote  "the  very  perti- 
nent summary  of  the  doctrine  by  Justice  Gray"  in 


38 

the  case  of  Sanford  Fork  &  Tool  Company,  Peti- 
tioner, 160  U.  S.  p.  247,  as  follows: 

"When  a  case  has  once  been  decided  by  this 
court  on  appeal,  and  remanded  to  the  Circuit 
Court,  whatever  was  before  this  court,  and  dis- 
posed of  by  its  decree,  is  considered  as  finally 
settled.  The  Circuit  Court  is  bound  by  the 
decree  as  the  law  of  the  case,  and  must  carry  it 
into  execution,  according  to  the  mandate.  That 
court  cannot  vary  it,  or  examine  it  for  any 
other  purpose  than  execution,  or  give  any  other 
or  further  relief,  or  review  it,  even  for  appar- 
ent error,  upon  any  matter  decided  on  appeal, 
or  intermeddle  with  it,  further  than  to  settle  so 
much  as  has  been  remanded.  Sibbald  v.  U.  S., 
12  Pet.  488,  492;  Railway  Co.  v.  Anderson,  149 
U.  S.  237,  13  Sup.  Ct.  843.  If  the  Circuit 
Court  mistakes  or  misconstrues  the  decrees  of 
this  court,  and  does  not  give  full  effect  to  the 
mandate,  its  action  may  be  controlled,  either 
upon  a  new  appeal  (if  involving  a  sufficient 
amount),  or  by  writ  of  mandamus  to  execute 
the  mandate  of  this  court." 

And  further,  at  page  552,  Judge  Lurton  says : 
"It  seems  to  us  that  the  opinions  and  decrees 
of  this,  as  a  court  of  appellate  jurisdiction,  are 
final  and  conclusive  upon  every  point  actually 
decided,  and  that  it  is  the  clear  duty  of  the 
lower  court  to  give  effect  to  the  decree  without 
modification  or  enlargement,  in  the  very  terms 
of  the  decree  here  rendered." 


39 

No  question  of  the  right  of  the  grantee  of  these 
lands,  by  an  absolute  grant  qualified  only  by  the 
provisos,  to  use  the  timber  upon  its  granted  land,  or 
to  take  the  coal  from  it  or  the  iron  that  might  be 
found  below  the  surface,  was,  as  we  have  already 
ventured  to  insist,  involved  or  raised  or  argued  or 
considered  or  decided.  That  issue  was  not  before 
the  court,  and  it  is  not  determinable  as  an  academic 
thesis,  or  otherwise  than  in  some  concrete  case  prop- 
erly calling  for  its  determination.  (Windsor  v. 
McVeigh,  93  U.  S.,  282-3).  Nevertheless,  gratui- 
tously, and  in  excess  of  the  mandate  of  the  Supreme 
Court,  the  decree,  as  proposed  by  the  government 
and  adopted  by  the  District  Court,  assumes  or  at- 
tempts to  foreclose  these  appellants  in  the  premises. 
If  there  is  anything  in  the  opinion  of  the  Supreme 
Court,  bearing  at  all  on  the  question,  it  is  to  be 
found  in  the  direction  for  a  temporary  injunction, 
where  our  right  to  make  sales  of  these  lands  to  set- 
tlers in  statutory  quantities  and  at  statutory  prices, 
and  our  right  to  make  use  of  the  timber,  are  dealt 
with  concurrently,  and  are  suspended  alike.  Both 
rights  are  associated  in  immediate  juxtaposition, 
and  both  rights  are  suspended  pending  the  interval 
of  contemplated  Congressional  action,  and  both 
rights  are  assumed  to  be  open  to  revival  in  the 
event  of  inaction  by  Congress. 

It  is  true  that  the  Supreme  Court  refused  to  for- 
feit this  grant.  It  is  true  that  the  Supreme  Court 
retained  the  title  to  these  lands  where  the  grant 


40 

had  put  it — in  the  railroad  company — but  the 
thought  seems  to  be,  that  the  failure  of  the  govern- 
ment to  achieve  a  forfeiture  may  be  repaired  by 
the  action  of  Congress,  and  that,  in  some  mysterious 
way,  an  appellate  jurisdiction  may  be  exercised  by 
the  legislature  to  review  the  judgment  of  the  Su- 
preme Court  and  to  declare  a  forfeiture  where  the 
court  had  decided  there  could  be  no  forfeiture.  In 
other  words,  it  is  the  idea,  as  put  forth  by  com- 
plainant in  the  argument  at  the  bar  of  the  District 
Court,  and  sought  to  be  realized  in  the  decree  as 
signed,  that  Congress,  by  legislation,  may  revest 
itself  with  the  title  which  it  had  granted  to  the 
railroad  company,  and  that,  after  all,  the  railroad 
company  has  a  mere  expectancy  in  a  fund  measured 
by  $2.50  an  acre  in  the  total  acreage  concerned,  sub- 
ject, again,  to  deduction  by  reason  of  any  excess  over 
$2.50  an  acre,  which  the  railroad  company  may 
have  received  for  some  of  these  lands,  and  quite  re- 
gardless of  the  administration  expenses,  including 
taxes  upon  a  full,  assessed  value  of  $11  an  acre,  in- 
curred by  the  railroad  company  in  handling  the 
grant,  and  regardless  as  well  of  the  uncompensated 
services  rendered  and  to  be  rendered  by  the  railroad 
company  through  all  the  years  in  transporting  gov- 
ernment troops  and  materials,  and  regardless  also 
of  the  fact  that  the  railroad  company  kept  its  con- 
tract with  the  government,  and,  by  the  construction 
of  this  road,  earned  the  grant  and  received  its  pat- 
ents accordingly.     We  are  no  longer,  it  would  seem, 


41 

the  owners  of  this  land  by  absolute  grant,  or  at  all ; 
but  by  a  novel  species  of  equitable  or  inequitable 
conversion  the  land  is  now,  by  amendatory  legisla- 
tion, to  be  revested  in  the  grantor,  and  we  are  to  be 
transformed  into  beneficiaries  of  a  depleted  and  van- 
ishing fund. 

The  Grantee's  Estate. 

We  venture  to  think,  however,  that  we  are  the 
owners  of  this  land,  by  right,  and  as  of  absolute 
grant,  qualified  only  by  these  provisos  and  by  noth- 
ing else,  and  that,  as  such  owners,  we  are  entitled 
to  the  timber  upon  our  granted  land,  and  entitled  as 
well  to  take  the  coal  or  the  iron,  for  example,  that 
we  may  find  below  the  surface. 

This  grant  was  not  a  gift;  it  passed  to  the  rail- 
road company  upon  full  and  ample  consideration. 
"The  adventurers,  who  obtained  the  charter  and 
who  accepted  it,"  to  use  the  language  of  this  court, 
in  Piatt  v.  U.  P.  R.  R.  Co.,  99  U.  S.,  48,  "undertook 
to  construct  and  maintain  the  public  work.  Their 
undertaking  is  the  consideration  of  the  grant,  and 
without  legislative  consent,  they  cannot  throw  off 
the  obligation  they  have  assumed".  Nor,  we  will 
add,  can  the  grantor,  without  consent  of  the  railroad 
company,  repudiate  the  grant  which  it  made. 

The  granting  act  in  question  here,  includes  special 
considerations  and  onerous  obligations  as  against 
the  railroad  company.  It  requires  the  grantee  to 
transport  the  mails  and  to  transmit  the  dispatches 


42 

of  the  government,  preferentially  in  point  of  serv- 
ice, and  at  reasonable  rates,  not  to  exceed  those  paid 
by  private  parties;  and  it  obligates  the  grantee,  for 
all  time,  to  the  transportation,  free  of  charge,  of 
the  troops  and  property  of  the  United  States.  The 
government  holds  to  the  railroad  company  "a  very 
important  relation,  namely,  that  of  contract". 
(United  States  v.  U.  P.  R.  R.  Co.,  98  U.  S.,  569, 
613).  The  grantees  "cannot  throw  off  the  obliga- 
tion they  have  assumed".  (Piatt  v.  U.  P.  R.  R.  Co., 
99  U.  S.,  48). 

The  language  of  this  court,  in  the  recent  case  of 
Burke  v.  Southern  Pacific  R.  R.  Co.,  234  U.  S.,  at 
pages  679-680,  is  wholesome  reading  at  this  point: 
"We  first  notice  a  contention  advanced  on 
the  part  of  the  mineral  claimants,  to  the  ef- 
fect that  the  grant  to  the  railroad  company 
was  merely  a  gift  from  the  United  States,  and 
should  be  construed  and  applied  accordingly. 
The  granting  act  not  only  does  not  support  the 
contention  but  refutes  it.  The  act  did  not  fol- 
low the  building  of  the  road  but  preceded  it. 
Instead  of  giving  a  gratuitous  reward  for  some- 
thing already  done,  the  act  made  a  proposal  to 
the  company  to  the  effect  that  if  the  latter 
would  locate,  construct  and  put  into  operation 
a  designated  line  of  railroad,  patents  would  be 
issued  to  the  company  confirming  in  it  the 
right  and  title  to  the  public  lands  falling  within 
the  descriptive  terms  of  the  grant.  The  pur- 
pose was  to  bring  about  the  construction  of  the 
road,  with  the  resulting  advantages  to  the  gov- 


43 

ernment  and  the  public,  and  to  that  end,  pro- 
vision was  made  for  compensating  the  company 
if  it  should  do  the  work,  by  patenting  to  it  the 
lands  indicated.  The  company  was  at  liberty 
to  accept  or  reject  the  proposal.  It  accepted  in 
the  mode  contemplated  by  the  act,  and  thereby 
the  parties  were  brought  into  such  contractual 
relations  that  the  terms  of  the  proposal  became 
obligatory  on  both.  Menotti  v.  Dillon,  167  U. 
S.  703,  721.  And  when,  by  constructing  the 
road  and  putting  it  into  operation,  the  com- 
pany performed  its  part  of  the  contract,  it 
became  entitled  to  the  performance  by  the  gov- 
ernment. In  other  words,  it  earned  the  right  to 
the  lands  described.  Of  course,  any  ambiguity 
or  uncertainty  in  the  terms  employed  should 
be  resolved  in  favor  of  the  government,  but  the 
grant  should  not  be  treated  as  a  mere  gift." 

This  very  act  of  1866  was  before  the  Court  in 
Bybee  against  Oregon  &  California  Railroad  Com- 
pany, 139  U.  S.  663,  674.  The  court  had  no  difficulty 
at  that  time  in  perceiving  that  this  grant  was  like 
any  other  railroad  land  grant;  that  it  was  a  grant 
of  real  estate,  not  a  contingent  assignment  of 
personalty  by  way  of  an  expectancy  in  some  fund, 
and  that  it  was  a  grant  in  praesenti.  The  court 
said: 

"The  act  making  the  grant  in  aid  of  this 
road  does  not,  in  its  words  of  conveyance, 
differ  materially  from  a  large  number  of 
similar  acts  passed  by  Congress  in  aid  of  the 
construction  of  roads  in  different  parts  of  the 


44 

West,  which  have  been  considered  by  this 
court  as  taking  effect  in  praesenti,  although 
the  particlular  lands  to  which  the  grant  is 
applicable  remain  to  be  selected  and  identified 
when  the  road  is  located,  and  the  map  is  filed 
with  the  Secretary  of  the  Interior.  The  act 
then  operates  as  a  grant  of  all  odd  numbered 
sections  within  the  limits,  except  so  far  as  they 
may  have  been  in  the  meantime,  'granted,  sold, 
reserved,  occupied  by  homestead  settlers,  pre- 
empted or  otherwise  disposed  of.'  " 

And  what  this  Court  decided  in  the  case  at  bar, 
and  its  decision  is  now  "the  law  of  the  case"  (Bissell 
v.  Goshen,  72  Fed.  545 ;  Sanford  Fork  &  Tool  Com- 
pany, Petitioner,  160  U.  S.  247;  Roberts  v.  Cooper, 
20  How.  467),  was  this: 

At  pages  434-5  of  the  opinion  in  the  case  at  bar, 
it  is  said: 

"There  was  a  complete  and  absolute  grant 
to  the  railroad  company  with  power  to  sell, 
limited  only  as  prescribed,  and  we  agree  with 
the  Government  that  the  company  'might 
choose  the  actual  settler;  might  sell  for  any 
price  not  exceeding  $2.50  an  acre;  might  sell  in 
quantities  of  40,  60,  or  100  acres,  or  any 
amount  not  exceeding  160  acres.'  And  we  add, 
it  might  choose  the  time  for  selling  or  its  use  of 
the  grants  as  a  means  of  credit,  subject  ulti- 
mately to  the  restrictions  imposed;  and  we  say 
'restrictions  imposed'  to  reject  the  contention 
of  the  railroad  company  that  an  implication 
of  the  power  to  mortgage  the  lands  carried  a 


45 

right   to   sell   on   foreclosure   divested   of   the 
obligations  of  the  provisos." 

And  again,  at  page  422:  "The  language  of  the 
grants  and  of  the  limitations  upon  them  is  gen- 
eral. We  cannot  attach  exceptions  to  it.  The 
evil  of  an  attempt  is  manifest.  The  grants  must 
be  taken  as  they  were  given.  Assent  to  them  was 
required  and  made,  and  we  cannot  import  a  different 
measure  of  the  requirement  and  the  assent  than  the 
language  of  the  act  expresses.  It  is  to  be  remem- 
bered, the  acts  are  laws  as  well  as  grants,  and  must 
be  given  the  exactness  of  laws." 

Again,  at  page  436:  "We  can  only  enforce  the 
provisos  as  written,  not  relieve  from  them." 

At  page  432,  recalling  now  the  language  just 
quoted,  that  "there  was  a  complete  and  absolute 
grant  to  the  railroad  company,  with  power  to  sell, 
limited  only  as  prescribed" — we  quote  from  what 
the  court  says  of  these  prescribed  limitations  or 
provisos:  "Their  language  is  not  directive;  it  is 
restrictive  only.  With  this  exception  the  grant  is 
unqualified." 

The  provisos,  therefore,  and  such  is  now  the  law 
of  this  case,  and  of  this  second  appeal  (Roberts  v. 
Cooper,  20  How.,  467),  must  be  taken  as  they 
are  written;  they  are  not  directive,  they  are  re- 
strictive only;  the  statute  must  be  administered 
with  the  exactness  of  a  law ;  the  grant  is  unqualified, 
except  as  limited  by  the  terms  of  the  provisos.    The 


46 

limitations  there  found  extend  only  to  a  restraint 
upon  the  alienation  of  the  land  by  the  grantee;  they 
do  not  affect  the  use  and  enjoyment  of  the  estate, 
held  in  "complete,  absolute  and  unqualified  grant." 
It  cannot  be  questioned,  we  venture  to  think,  that 
the  grantee,  would  be  within  its  rights  in  making 
leases  of  the  land,  and  applying  the  rents  upon  the 
construction  account.  Nor,  we  submit,  can  it  be 
questioned  that  the  grantee  would  be  authorized 
to  take  stone  from  the  land  and  use  it  to  build  a 
railroad  bridge  or  a  station  house,  or  for  the  matter 
of  that,  to  turn  the  stone  into  money  and  place  the 
avails  against  construction  debt.  Nor  do  we  think 
it  could  be  questioned  that  the  grantee  could  take 
iron  from  the  granted  land  for  use  upon  its  rail- 
road fixtures  or  structures,  or  could  take  coal  from 
the  land — if  such  minerals  were  found  there — to 
burn  in  the  furnaces  of  its  locomotives  or  of  its  ma- 
chine shops.  If  the  grantee  should  farm  a  patch  of 
arable  area,  and  turn  the  farm  products  into  money 
and  use  that  money  to  help  pay  coupon  interest  on 
the  bonded  debt,  it  would  be  within  its  rights  and 
within  the  measure  of  its  estate — for  that  estate 
is  "a  complete  and  absolute  grant  to  the  railroad 
company  with  power  to  sell,  limited  only  as  pre- 
scribed." If  all  this  be  true,  there  is  no  reason 
apparent  to  us  upon  the  face  and  terms  of  the  grant 
why  the  right  of  the  grantee  in  like  manner  to  make 
use  of  the  timber  upon  the  land,  should  be  differen- 
tiated or  disparaged. 


47 

It  would  be  passing  strange  if  the  government 
should  now  maintain  that  the  company  has  no  right 
to  the  timber  upon  these  lands  because  and  although, 
for  many  years  before  coal  was  used  as  fuel,  it 
burned  this  timber  in  its  engines  without  question; 
and  the  right  to  use  that  timber,  whether  to  burn 
it  as  fuel,  or  to  use  it  in  the  upkeep  and  mainten- 
ance of  the  railroad,  is  in  the  forefront  of  the  act  of 
Congress  itself,  for  that  act  granted  the  lands  "to 
secure  safe  and  speedy  transportation  of  mails, 
troops,  munitions  of  war  and  public  stores  over  the 
line  of  said  railroad."  There  could  be  no  such 
transportation  begun  or  kept  up  without  a  railroad, 
a  railroad  constructed  not  only  but  also  maintained, 
and  without  fuel  for  motive  power.  Would  the 
use  of  that  timber  to  help  pay  the  construction  debt 
be  in  contravention  of  the  railroad  policy  of  the  act? 
Would  the  removal  of  that  timber  go  in  defeat  of  the 
settlement  policy  of  the  act?  Would  it  not  be 
primarily  and  directly  in  aid  of  such  policy? — For 
it  is  obvious  enough  that  without  a  clearing  most  of 
the  land  is  unfit  for  settlement. 

Ferens  ligna  in  silva — but  we  beg  to  quote  the 
apt  language  from  Reeves  on  Real  Property,  Section 
423,  where,  in  speaking  of  the  grantee  of  the  fee 
simple  estate,  the  author  says : 

"Subject  to  any  restrictions  under  which  he 
may  have  taken  it,  and  subject  also  to  the  man- 
date of  the  maxim  sic  utere  tuo  ut  alienum  non 
laedas,  its  owner  when  in  possession  may  use 


48 

it  for  any  purpose  and  in  any  manner  that  he 
may  choose;  he  may  cut  timber,  open  and  work 
mines,  cultivate  the  soil  even  to  exhaustion, 
build  or  pull  down  houses,  commit  waste,  or 
injure  or  destroy  any  part  of  it  as  he  may 
please.  Not  only  does  he  have  the  right  to  sell 
or  otherwise  dispose  of  it  as  a  whole,  but  he 
may  grant  or  convey  out  of  it  any  inferior  in- 
terests, such  as  estates  for  years,  for  life  or  in 
tail." 

Schulenberg  against  Harriman,  21  Wall.,  44,  is  a 
leading  and  classical  case  in  this  court,  and  is  very 
much  to  the  point  here.  It  was  a  railroad  land 
grant  case,  as  the  case  at  bar  is ;  it  was  a  grant  con- 
ditioned upon  construction  of  the  railroad,  like  the 
case  at  bar ;  it  was  a  timber  case,  as  in  part  the  case  at 
bar  is. 

The  grant  in  the  Schulenberg  case  was  made,  not 
in  the  first  instance  to  the  railroad  company,  but 
directly  to  the  State  of  Wisconsin.  The  fee  simple 
title  of  the  state  was  qualified  by  a  restraint  on  the 
grantee's  power  to  alienate.  "The  State",  to  quote 
the  language  of  this  court,  (21  Wall.,  at  page  59) 
"by  the  terms  of  the  grants  from  Congress,  possessed 
no  authority  to  dispose  of  the  lands  beyond  one  hun- 
dred and  twenty  sections,  except  as  the  road,  in  aid 
of  which  the  grants  were  made,  was  constructed." 
Conveyances  were  to  be  made  by  the  state  of  the 
granted  lands,  from  time  to  time,  as  sections  of  the 
road  should  be  constructed,  no  constructed  section 


49 

to  be  less  than  twenty  consecutive  miles.  In  the 
event  that  the  road  should  not  be  completed  within 
ten  years,  "no  further  sales  shall  be  made,  and  the 
lands  unsold  shall  revert  to  the  United  States".  (21 
Wall.,  pp.  59,  60)     Said  this  court: 

"The  power  of  disposal,  and  the  provision  for 
the  lands  reverting,  both  imply  what  the  first 
section  in  terms  declares,  that  a  grant  is  made, 
that  is,  that  the  title  is  transferred  to  the  State. 
It  is  true  that  the  route  of  the  railroad,  for  the 
construction  of  which  the  grant  was  made,  was 
yet  to  be  designated,  and  until  such  designa- 
tion the  title  did  not  attach  to  any  specific 
tracts  of  land.  The  title  passed  to  the  sections, 
to  be  afterwards  located; — when  the  route  was 
fixed  their  location  became  certain,  and  the 
title,  which  was  previously  imperfect,  acquired 
precision  and  became  attached  to  the  land." 
(p.  60) 

It  was  further  held  that  the  rule  of  the  common 
law,  requiring  the  possibility  of  present  identifica- 
tion of  property  to  the  validity  of  its  transfer,  and 
treating  a  grant  of  lands  to  be  afterwards  desig- 
nated, not  as  an  actual  conveyance,  but  as  a  mere 
contract  to  convey,  had  no  application  to  the  legis- 
lative grant  in  question.  And  this,  for  the  reason 
so  often  repeated  since — "A  legislative  grant  oper- 
ates as  a  law  as  well  as  a  transfer  of  the  property, 
and  has  such  force  as  the  intent  of  the  legislature 
requires",     (p.  62) 


50 

The  provision  in  the  granting  act  "that  all  lands 
remaining  unsold  after  ten  years  shall  revert  to 
the  United  States,  if  the  road  be  not  then  completed, 
is  no  more  than  a  provision  that  the  grant  shall  be 
void,  if  a  condition  subsequent  be  not  performed." 

(p.  62) 
Touching  the  restraint  upon  the  power  of  the 

state  to  alienate  the  granted  lands,  this  court  said: 
"The  prohibition  against  further  sales,  if 
the  road  be  not  completed  within  the  period 
prescribed,  adds  nothing  to  the  force  of  the 
provision.  A  cessation  of  sales  in  that  event 
is  implied  in  the  condition  that  the  lands  shall 
then  revert;  if  the  condition  be  not  enforced 
the  power  to  sell  continues  as  before  its  breach, 
limited  only  by  the  objects  of  the  grant,  and 
the  manner  of  sale  prescribed  in  the  act."  (p. 
63) 

No  action  had  been  taken  by  the  United  States, 
as  the  opinion  points  out,  "either  by  legislation  or 
judicial  proceedings  to  enforce  a  forfeiture  of  the 
estate  granted  by  the  acts  of  1856  and  1864.  The 
title  remains,  therefore,  in  the  State" — this  court 
continues — "as  completely  as  it  existed  on  the  day 
when  the  title  by  location  of  the  route  of  the  rail- 
road acquired  precision  and  became  attached  to  the 
adjoining  alternate  sections". 

Schulenberg,  a  stranger  to  the  State's  title,  not 
in  privity  with  the  grantee  of  the  land,  had  gone 
upon  the  granted  land,  and  cut  the  standing  timber 


51 

into  logs.  While  he  was  in  the  quiet  and  peaceable 
possession  of  those  logs,  the  defendant,  Harriman, 
as  the  agent  of  the  state  and  acting  upon  its  direc- 
tion, seized  the  logs,  some  sixteen  hundred  thousand 
feet  of  pine  saw-logs.  All  this  happened  long  after 
the  expiration  of  the  ten  years  fixed  by  the  grant- 
ing act  for  the  completion  of  the  road — no  road 
had  ever  been  built. 

Schulenberg  brought  replevin  against  Harriman 
for  the  unlawful  seizure  and  detention  of  personal 
property,  to-wit,  the  severed  logs.  This  court  up- 
held the  seizure  of  the  logs  by  the  State's  agent,  and 
upon  the  simple  ground  that  the  logs  belonged  to 
the  grantee  of  the  land.  We  quote  from  page  64 
of  the  opinion : 

"The  title  to  the  land  remaining  in  the  State, 
the  lumber  cut  upon  the  land  belonged  to  the 
State.  Whilst  the  timber  was  standing,  it 
constituted  a  part  of  the  realty;  being  severed 
from  the  soil,  its  character  was  changed;  it 
became  personalty,  but  its  title  was  not  affected, 
it  continued  as  previously,  the  property  of  the 
owner  of  the  land,  and  could  be  pursued  wher- 
ever it  was  carried.  All  the  remedies  were 
open  to  the  owner,  which  the  law  affords  in 
other  cases  of  the  wrongful  removal  or  con- 
version of  personal  property". 

If  the  severed  timber,  in  Schulenberg  against 
Harriman,  supra,  belonged  to  the  state,  if  the  state 
could  pursue  the  physical  logs,  as  so  much  personal 


52 

property,  and  re-capture  them  in  replevin,  or  if  it 
could  avail  itself  of  the  remedy  in  trover,  and  re- 
cover and  appropriate  their  value;  and  all  this 
years  after  the  time  had  expired  for  the  construc- 
tion of  the  railroad,  and  when  no  railroad  had  been 
built  or  begun — it  must  be  clearer  yet  that,  in  the 
case  at  bar,  where  there  was  no  forfeiture,  no 
ground  for  forfeiture,  no  room  for  forfeiture,  and 
where  the  grant  was  earned  and  the  patents  were 
issued  for  a  constructed  railroad,  the  severed  timber 
belongs  to  the  grantee  by  every  right  and  in  full  title, 
and  the  minerals  as  well. 

Schulenberg  against  Harriman  was  decided  by 
this  court  in  October,  1874.  Nearly  twenty-five 
years  after,  on  December  12,  1898,  the  case  of 
United  States  against  Loughrey,  172  U.  S.,  206,  was 
decided  by  this  court.  Like  the  Schulenberg  case,  it 
was  a  timber  case,  under  a  railroad  land  grant,  a  case 
of  severed  timber.  The  action  was  not  in  replevin,  for 
the  physical  logs,  as  in  the  Schulenberg  case;  it 
was  in  trover,  for  the  money  value  of  the  cut  timber. 
Unlike  Schulenberg  against  Harriman,  the  title 
litigated  to  the  cut  timber  in  the  Loughrey  case  was 
not  the  title  of  the  grantee  of  the  land  grant — the 
State  of  Michigan — but  it  was  the  alleged  title  of 
the  grantor,  namely,  the  United  States.  The  land, 
in  the  first  instance,  had  been  public  land,  the  prop- 
erty of  the  United  States. 

By  an  act  of  Congress  of  June  3,  1856,  substan- 
tially  identical   in   the   granting  clause   with   the 


53 

granting  acts  in  the  case  at  bar,  the  land  in  ques- 
tion was  granted  to  the  State  of  Michigan,  to  aid 
in  the  construction  of  a  railroad.    It  was  provided : 
"That  the  lands  hereby  granted  shall  be  ex- 
clusively applied  in  the  construction   of  that 
road,  for  and  on  account  of  which  said  lands 
are  hereby  granted,  and  shall  be  disposed  of 
only  as  the  work  progresses,  and  the  same  shall 
be  applied  to  no  other  purpose  whatsoever". 

This  restraint  on  the  power  of  the  state  to  trans- 
fer the  granted  lands  was  emphasized  by  the  further 
provision  "that  the  said  lands  hereby  granted  to 
the  said  state,  shall  be  subject  to  the  disposal  of  the 
legislature  thereof,  for  the  purposes  aforesaid,  and 
no  other". 

The  granting  act  provided  for  a  sale  of  the  lands 
for  the  benefit  of  the  proposed  railroads,  as  they 
were  constructed.  And  a  condition  subsequent  was 
imposed,  that,  "if  any  of  said  roads  is  not  com- 
pleted within  ten  years,  no  further  sales  shall  be 
made,  and  the  lands  unsold  shall  revert  to  the 
United  States". 

And  of  the  title  and  estate  enuring  thereunder, 
this  court  said:  (United  States  against  Loughrey, 
172  U.  S.,  p.  209)  "Under  this  act  the  State  of 
Michigan  took  the  fee  of  the  lands  to  be  thereafter 
identified,  subject  to  a  condition  subsequent  that  if 
the  roads  were  not  completed  within  ten  years  the 
lands  unsold  should  revert  to  the  United  States". 
The  opinion  of  the  court  goes  on : 


54 

"With  respect  to  this  class  of  estates,  Pro- 
fessor Washburn  says  that  'so  long  as  the  es- 
tate in  fee  remains,  the  owner  in  possession 
has  all  the  rights  in  respect  to  it,  which  he 
would  have  if  tenant  in  fee  simple,  unless  it  be 
so  limited  that  there  is  properly  a  reversionary 
right  in  another — something  more  than  a  pos- 
sibility of  reverter  belonging  to  a  third  person, 
when,  perhaps,  chancery  might  interpose  to 
prevent  waste  of  the  premises'.  1  Wash.  Real 
Prop.  5th  ed.  95." 

This  court  then  makes  reference  to  the  leading 
and  ruling  case  of  De  Peyster  against  Michael, 
6  N.  Y.,  467,  506,  in  which  Judge  Ruggles,  a  great 
judge,  speaking  for  his  court,  pronounced  one  of 
the  most  learned  and  interesting  judgments  in  the 
New  York  Reports.  The  reference  to  the  De  Peyster 
case,  by  this  court,  is  in  these  words : 

"The  right  of  re-entry  *  *  *  *  'is  not  a  rever- 
sion, nor  is  it  the  possibility  of  reversion,  nor 
is  it  any  estate  in  the  land;  (Italicized  by  this 
court)  It  is  a  mere  right  or  chose  in  action, 
and  if  enforced,  the  grantor  would  be  in,  by  the 
forfeiture  of  a  condition,  and  not  by  a  reverter. 
*  *  *  It  is  only  by  statute,  that  the  assignee 
of  the  lessor  can  re-enter  for  condition  broken. 
But  the  statute  only  authorized  the  transfer  of 
the  right,  and  did  not  convert  it  into  a  rever- 
sionary interest,  nor  into  any  other  estate. 
(Italicized  by  this  court)  *  *  *  When  property 
is  held  on  condition,  all  the  attributes  and  in- 
cidents of  absolute  property  belong  to  it,  until 


55 

the  condition  be  broken'."     (Italicized  by  this 
court) 

If,  now,  the  State  of  Michigan,  in  fulfillment  of 
its  covenant,  that  the  lands  should  be  held  for  railroad 
purposes  only,  had  transferred  such  lands  in  aid 
of  railroad  construction,  it  would  follow,  obviously 
enough,  as  to  the  property  so  transferred,  in  the 
hands  of  the  grantee,  that  "all  the  attributes  and  in- 
cidents of  absolute  property  belong  to  it  until  the 
condition  be  broken".  But  no  such  situation,  in  re- 
spect to  any  grantee  of  the  State  of  Michigan  arose ; 
for  the  reason,  as  found  by  the  trial  court,  "that 
said  railroad  was  never  built,  and  said  grant  of 
lands  was  never  earned  by  the  construction  of  any 
railroad".     (172  U.  S.,  p.  208) 

In  1887,  some  twelve  years  after  the  period  of  ten 
years,  fixed  by  the  granting  act  for  the  construc- 
tion of  the  railroad  had  expired,  Joseph  E.  Sauve 
cut  some  six  hundred  thousand  feet  of  timber  on  the 
granted  lands,  removed  eighty  thousand  feet  of  the 
timber  so  cut,  and  left  the  balance  skidded  upon  the 
lands.  The  defendant,  Loughrey,  was  charged  as  a 
purchaser  of  the  cut  timber  from  Sauve,  and  the 
United  States  sued  him  in  trover  to  recover  its 
value. 

Under  the  decision  in  Schulenberg  against  Harri- 
man,  supra,  if  no  act  had  been  passed  by  Congress, 
forfeiting  the  land  grant,  for  breach  of  the  condi- 
tion subsequent,  in  respect  to  the  construction  of  the 


56 

railroad,  at  the  time  when  Sauve  cut  this  timber 
in  1887,  it  would  seem  that  the  title  to  the  timber 
was  still  in  the  grantee,  the  State  of  Michigan,  and 
that  the  United  States  was  without  estate,  right, 
title  or  interest,  to  maintain  trover  for  its  value. 
It  was  held  by  this  court,  quoting  from  Mr.  Justice 
Field  in  the  Schulenberg  case,  as  follows : 

"The  title  to  the  land  remaining  in  the  State, 
the  lumber  cut  upon  the  land  belonged  to  the 
State.  Whilst  the  timber  was  standing  it 
constituted  a  part  of  the  realty;  being  severed 
from  the  soil  its  character  was  changed;  it 
became  personalty,  but  its  title  was  not 
affected ;  it  continued  as  previously  the  property 
of  the  owner  of  the  land,  and  could  be  pursued 
wherever  it  was  carried.  All  the  remedies  were 
open  to  the  owner  which  the  law  affords  in  other 
cases  of  the  wrongful  removal  or  conversion 
of  personal  property".     (172  U.  S.,  p.  211) 

And  the  court,  in  the  Loughrey  case,  goes  on  to 
say: 

"It  follows  that  the  United  States,  having 
no  title  to  the  lands  at  the  time  of  the  tres- 
pass and  no  right  to  the  possession  of  the  tim- 
ber, are  in  no  position  to  maintain  this  suit", 
(p.  211) 

But  the  Loughrey  case  contained  a  differential 
element.  In  the  Schulenberg  case,  while  no  rail- 
road had  ever  been  built,  yet  forfeiture  had  not 
been  asserted  by  the  United  States  for  breach  of 


57 

the  condition.  In  the  Loughrey  case,  however,  a 
year  or  more  after  Sauve  had  cut  the  timber,  Con- 
gress passed  the  act  of  March  2,  1889,  forfeiting 
the  land  grant;  and  it  was  argued  for  the  United 
States  that  this  forfeiture  "operated  by  relation 
to  revest  in  the  United  States  title  to  the  timber, 
which  had  been  cut  during  the  winter  of  1887  and 
1888,  and  prior  to  the  act  of  forfeiture".  This  court 
replied : 

"The  position  of  the  plaintiffs  must  neces- 
sarily be  that  this  act  of  forfeiture  not  only 
revested  in  the  United  States  the  title  to  the 
lands  as  of  a  date  prior  to  the  cutting  of  the 
timber  in  question,  but  also  revested  them  with 
the  property  in  the  timber  which  had  been  cut 
while  the  lands  belonged  to  the  State  of  Michi- 
gan. Had  this  act  of  forfeiture  not  been 
passed,  there  could  be  no  question  that,  under 
the  case  of  Schulenberg  v.  Harriman,  21  Wall. 
44,  this  timber  would  have  belonged  to  the 
State  of  Michigan,  and  no  action  therefor  could 
have  been  brought  by  the  United  States." 

The  court  goes  on : 

"But  conceding  all  that  is  contended  for  the 
plaintiffs  with  respect  to  the  revestiture  of  the 
title  to  the  lands  by  this  act,  it  does  not  follow 
that  the  title  to  the  timber  which  had  been  cut 
in  the  meantime  was  also  revested  in  the  United 
States.  As  was  said  in  Schulenberg  v.  Harri- 
man, the  title  to  the  timber  remained  in  the 
State  after  it  had  been  severed.     But  it  re- 


58 

mained  in  the  State  as  a  separate  and  inde- 
pendent piece  of  property,  and  if  the  State  had 
elected  to  sell  it,  a  good  title  would  have  thereby 
passed  to  the  purchaser,  notwithstanding  the 
subsequent  act  of  forfeiture". 

The  court  now  proceeds  to  use  language  of  in- 
terest here,  as  bearing  upon  a  somewhat  transpar- 
ent fallacy,  argued  by  the  government,  when  the 
case  here  was  at  the  bar  of  the  court  below.  It 
was  said  that  inasmuch  as  there  was  a  restraint 
upon  our  power  to  alienate  lands,  except  to 
specified  persons,  we  had  no  right  to  make  use  of  the 
timber,  or  of  the  coal,  or  of  the  iron,  or  of  other 
product  or  deposit  of  the  soil,  because  it  was  all  a 
part  of  the  land.  Said  the  court,  in  speaking  of  the 
cut  timber,  in  the  Loughrey  case : 

"It  did  not  remain  the  property  of  the  State 
as  a  part  of  the  lands,  but  as  a  distinct  piece 
of  property,  although  the  State  took  its  title 
thereto  through  and  in  consequence  of  its  title 
to  the  lands.  From  the  moment  it  was  cut,  the 
State  was  at  liberty  to  deal  with  it  as  with  any 
other  piece  of  personal  property".  (172  U.  S., 
pp.  217-18) 

And  finally,  this  court  concludes: 

"Counsel  are  mistaken  in  supposing  that  the 
plaintiffs  (United  States)  had  an  immediate 
right  to  the  possession  of  this  timber.  They 
had  no  right  to  the  possession  of  the  land  until 
Congress  passed  the  act  of  March  2,  1889,  for- 


59 

feiting  the  grant.  Up  to  that  time  the  title 
was  in  the  State,  and  until  then  the  United 
States  had  no  more  right  to  enter  and  take 
possession  than  they  would  have  had  to  take 
possession  of  the  property  of  a  private  in- 
dividual".    (172  U.  S.,  p.  219) 

There  was  a  dissenting  opinion  in  the  Loughrey 
case.  It  went  upon  the  view,  that,  under  the  terms 
of  the  granting  act,  "the  State  of  Michigan  was  not 
the  beneficial  owner  of  the  land,  from  which  the 
timber  in  question  was  severed",     (p.  231) 

The  state  of  Michigan  was  regarded,  not  as  the 
grantee  of  a  "complete,  absolute  and  unqualified" 
title,  but  as  a  mere  trustee — the  trustee  of  an  ex- 
press trust,  to  hold  the  granted  lands,  in  the  first 
instance,  for  the  benefit  of  the  owners  of  a  line  of 
railroad,  if  such  railroad  should  be  constructed; 
and  secondarily,  for  the  benefit  of  the  United  States, 
in  the  event  that  a  forfeiture  should  be  declared  for 
breach  of  the  condition  subsequent,     (p.  221) 

The  forfeiture  having  been  declared  in  1889,  no 
execution  of  the  trust  having  been  effected,  in  favor 
of  the  primary  cestui,  namely,  the  owner  of  the 
contemplated  line  of  railroad,  no  such  railroad  hav- 
ing been  brought  into  existence,  the  trust  having, 
therefore,  ceased, — it  was  argued  that  the  title  by 
forfeiture,  revested  by  statute  of  1889,  in  the 
United  States,  operated  by  relation  to  put  the  title, 
as  of  the  date  of  the  trespass,  in  the  United  States, 


60 

to  the  timber  which  had  been  severed  by  Sauve  in 
1887.     (p.  230) 

It  was  insisted  that  the  state,  whose  status,  as  a 
mere  trustee,  had  been  extinguished  by  the  for- 
feiture, "did  not  stand  in  the  attitude  of  a  grantee 
of  land,  upon  a  condition  subsequent,  to  whom  an 
absolute  conveyance  had  been  made  for  its  sole 
use  and  benefit.  Authorities,  therefore,  to  the  point 
that  in  the  case  of  such  a  conveyance,  the  only  right 
of  the  grantor  is  to  receive  back,  upon  re-entry,  the 
granted  land,  in  the  condition  in  which  it  might 
then  exist,  have  no  pertinency  in  a  case  like  the 
present,  where  the  grant  was  to  the  State,  not  as 
absolute  owner,  but  as  a  mere  trustee."     (p.  230) 

But,  we  inquire,  suppose  the  State  had  executed  the 
trust,  by  conveyance,  to  the  primary  beneficiary,  the 
railroad  company ;  and  suppose,  as  in  the  case  at  bar, 
the  railroad  company  had  earned  the  grant  by  con- 
struction of  the  road,  what  would  have  been  the 
view  of  the  dissenting  judges,  if  the  United  States 
had  challenged  the  right  of  the  railroad  company, 
in  an  action  against  Sauve,  or  the  purchaser  from 
Sauve,  to  recover  the  value  of  the  severed  timber? 

The  Loughrey  case  was  followed  and  approved 
by  this  court,  in  United  States  against  Tennessee  and 
Coosa  Railroad  Co.,  176  U.  S.,  242,  decided  Febru- 
ary 5,  1900. 

This,  again,  was  a  railroad  land  grant  case.  The 
grant  was  made  directly  to  the  State  of  Alabama, 
and  the  State,  pursuant  to  the  terms  of  the  granting 


61 

act,  conveyed  to  the  Coosa  Railroad.  The  grant 
was  made  on  June  3,  1856;  some  ten  miles  of  road 
were  constructed,  only  that  and  nothing  more;  and 
the  suit  was  brought  by  the  United  States,  under 
the  General  Forfeiture  Act  of  September  29,  1890, 
against  the  railroad  company,  to  forfeit  the  land 
grant. 

The  Government's  bill  set  up  the  failure  of  the 
company  to  build  the  road,  averred  the  execution  by 
the  railroad  company  in  1887,  of  the  conveyances  to 
one  Carlisle,  of  some  forty  thousand  acres  of 
granted  land,  alleged  that  there  was  valuable  timber 
on  the  lands,  which  the  company  and  other  persons 
were  cutting  and  carrying  away,  also  valuable  mines 
which  they  were  working;  and  asked  for  a  receiver 
and  injunction,  a  cancellation  of  the  conveyances, 
and  a  forfeiture  of  the  lands,  and  for  general  re- 
lief. 

It  was  held  by  this  court,  that  under  the  special 
terms  of  the  granting  act,  the  sale  of  one  hundred  and 
twenty  sections  of  the  grant,  "in  advance  of  the  com- 
mencement of  the  construction  of  the  road,"  was 
authorized ;  and  that  the  title  of  Carlisle,  to  so  much 
of  the  conveyed  land  as-  fell  within  this  tract  of  one 
hundred  and  twenty  sections,  must  be  sustained. 

It  was  further  held  that  the  conveyance  by  the 
company  of  so  much  of  the  grant,  as  was  cotermi- 
nous with  the  ten  miles  of  constructed  line,  must 
likewise  be  sustained,  inasmuch  as  the  act  of 
Congress  forfeited  those  lands  only,  which  were  not 


62 

opposite  the  completed  road  on  September  29,  1890. 
Schulenberg  against  Harriman  was  considered 
and  fully  approved;  also  the  decision  of  this  court, 
in  Railroad  Company  against  Courtright,  21  Wall., 
310.  And  the  Loughrey  case  is  cited  as  an  applica- 
tion of  the  same  principles.  Speaking  of  these  prior 
decisions,  the  court,  by  Mr.  Justice  McKenna,  said: 
(p.  253) 

"The  title  passed  to  the  State,  it  was  de- 
cided, continued  in  the  State  with  all  its  at- 
tributes and  power,  except  as  expressly  lim- 
ited, until  it  should  be  resumed  by  the  grantor 
by  appropriate  proceedings  for  breach  of  con- 
ditions. Hence  the  logs  in  that  case,  though 
cut  upon  land  to  aid  a  railroad  which  had  not 
been  constructed,  and  after  the  time  designated 
for  its  construction,  and  after  which  all  unsold 
lands  should  revert  to  the  State  (Government) 
was  held  to  belong  to  the  State  (the  grantee). 
And  in  the  Courtright  case  upon  the  same 
principles  it  was  held  that  lands  sold  by  the 
railroad  without  constructing  the  road  carried 
title  to  the  vendee.  There  was  a  reassertion 
and  an  application  of  the  same  principles  in 
United  States  v.  Loughrey,  172  U.  S.  206. 

It  follows  that  by  the  act  of  June  3,  1856, 
the  State  of  Alabama  took  the  title  to  the  lands 
in  controversy  upon  conditions  subsequent,  and 
conveyed  such  title  upon  the  same  conditions 
to  the  Coosa  Railroad ;  and  that  it  continued  in 
the  railroad  until  determined  by  proceedings, 
legislative  or  judicial,  for  such  forfeiture,  and 


63 

until  such  determination  all  the  rights  and 
powers  conferred  by  the  act  continued  and 
could  be  exercised". 

The  Loughrey  case  is  again  cited  as  authority  by 
this  court,  in  United  States  against  Anderson,  194 
U.  S.,  394,  decided  May  16,  1904.  The  opinion  is 
by  Mr.  Justice  White,  who  wrote  the  dissenting 
opinion  in  the  Loughrey  case. 

The  Anderson  case  is,  again,  the  case  of  a  rail- 
road land  grant.  Congress  had  made  a  grant  to 
the  State  of  Alabama  in  aid  of  railroad  construc- 
tion. The  State  accepted  the  grant,  and,  in  turn, 
granted  the  lands  to  the  Northeast  and  South- 
western Railroad,  an  Alabama  company,  to  be  used 
and  applied  by  said  company  "upon  the  terms  and 
conditions  in  said  act  of  Congress  contained".  The 
act  of  Congress  contained  an  indemnity  provision, 
as  follows:  "But  in  case  it  shall  appear  that  the 
United  States  have — when  the  lines  or  routes  of 
said  roads  are  definitely  fixed — sold  any  sections  or 
any  parts  thereof,  granted  as  aforesaid ;  or  that  the 
right  of  pre-emption  has  attached  to  the  same: — 
then  it  shall  be  lawful  for  any  agent  or  agents,  to 
be  appointed  by  the  governor  of  said  State,  to  select, 
subject  to  the  approval  of  the  Secretary  of  the  In- 
terior", a  corresponding  quantity  of  indemnity  land 
from  the  adjacent  alternate  sections,  within  the 
maximum  limit  of  fifteen  miles.  An  order  of  with- 
drawal was  made  by  the  Land  Department  of  such 
lands  as  were  assumed  to  be  included  within  the 


64 

place  and  indemnity  limits  of  the  grant,  and  among 
these  withdrawn  lands  was  the  land  in  suit.  The 
railroad  was  constructed,  and  the  grant  was  earned. 

In  December  1887,  and  pursuant  to  the  act  of 
Congress,  an  agent  was  appointed  by  the  Governor 
of  Alabama  to  select  indemnity  lands,  in  lieu  of 
lands  within  the  primary  limits  of  the  grant,  which 
had  been  lost  to  the  railroad  company  by  sale  or 
pre-emption.  The  agent  made  the  selections  and 
tendered  the  legal  fees  and  charges,  but  the  local 
land  officers  rejected  the  selections,  and  an  appeal 
was  taken  to  the  Commissioner  of  the  General  Land 
Office.  "In  April  1896,  (some  eight  or  nine  years 
after  the  selections  had  been  made)  the  appeal  was 
decided  in  favor  of  the  selections,  which  were  ap- 
proved, and  the  title  consequently  passed  from  the 
United  States  to  the  State  of  Alabama,  in  trust  for 
its  grantees,  under  the  act  of  Congress".  By  mesne 
conveyance  the  railroad  title  passed  to  the  plaintiffs 
in  the  action  below,  namely,  Anderson  and  others; 
and  it  was  between  these  plaintiffs  and  the  United 
States  that  the  action  was  litigated. 

It  was  not  a  timber  case  this  time,  but  a  mineral 
case,  and  it  arose  in  this  way,  as  stated  by  Mr. 
Justice  White : 

"During  the  period,  however,  which  inter- 
vened between  the  selections  of  land  made  by 
the  agent  of  the  State  of  Alabama  and  the 
approval  of  the  selections  by  the  Secretary  of 
the   Interior,   certain   persons  went  upon  the 


65 

lands  selected  and  removed  therefrom  valuable 
iron  ore  and  lime  rock.  After  the  approval  of 
the  selections  the  United  States  brought  a  suit 
to  recover  from  the  persons  who  had  thus  tres- 
passed upon  the  lands,  the  value  of  the  product 
by  them  removed.  The  owners  of  the  land,  in 
pursuance  of  the  selections,  (Anderson  and 
others)  asserted  a  claim  to  the  benefit  of  the 
recovery  which  might  be  made,  but  assented  to 
a  compromise  made  by  the  United  States  with 
the  trespassers,  by  which  fifteen  thousand  dol- 
lars was  paid  to  the  United  States,  as  the  value 
of  the  material  taken  from  the  land.  The 
owners  of  the  land  at  the  time  of  the  compro- 
mise protested  that  they  alone  were  entitled  to 
receive  the  sum  paid  to  the  United  States,  and 
reserved  their  right  to  recover  the  same  from 
the  United  States". 

As  a  sequel,  Anderson  and  the  other  owners,  sued 
the  United  States  for  the  fifteen  thousand  dollars, 
in  the  Court  of  Claims.  Judgment  went  against  the 
United  States,  and  the  case  was  brought  here  by 
the  government  on  appeal  from  the  judgment. 

"The  sole  contention  of  the  Government",  says  Mr. 
Justice  White,  "is  that  the  plaintiffs,  after  applica- 
tion for  selections  and  before  approval  of  the  selec- 
tions, had  no  such  title  to  the  land  as  would  have 
justified  a  recovery  from  the  trespassers,  and,  a 
fortiori,  therefore,  had  no  such  title  as  would  war- 
rant their  recovering  from  the  United  States  the 
sum  of  money  which  it  collected  from  the  trespassers 


66 

for  the  elements  removed  from  the  land  during  the 
period  between  the  date  of  the  application  for  selec- 
tions and  the  approval  of  the  same  by  the  Secretary 
of  the  Interior". 

The  Government,  it  is  pointed  out,  conceded  the 
act  of  Congress  to  be  a  grant  in  praesenti  of  the 
land  within  the  primary  limits,  but  denied  that  any 
right  to  the  indemnity  lands  vested  in  the  grantee 
"until  aproval  of  the  selections  by  the  proper  officers 
of  the  government;  and  hence  the  legal  title  was 
in  the  United  States,  as  to  such  lands,  pending  ac- 
tion on  the  application  for  selections,  and,  there- 
fore, at  the  time  of  the  trespass,  the  United  States 
was  alone  authorized  to  recover  for  the  depredations 
committed". 

Mr.  Justice  White  readily  yields  to  the  general 
doctrine  of  indemnity  selection,  that  the  legal  title 
to  the  indemnity  land  remains  in  the  United  States 
until  divested  by  the  approval  of  the  selections,  but 
he  does  not  conceive  that  the  doctrine  rules  the  case 
before  him.  "On  this  record,"  he  says,  "the  rights 
of  third  parties  are  not  involved,  since  the  contro- 
versy concerns  only  the  right  of  the  United  States 
to  retain,  as  against  its  grantees,  the  proceeds  re- 
covered by  it,  as  the  result  of  a  trespass  upon  land, 
after  an  application  for  the  selection  of  such  land 
and  pending  action  thereon  by  the  proper  officers 
of  the  Government.  Under  these  circumstances,  the 
case  is  one  for  the  application  of  the  fiction  of  re- 
lation, by  which,  in  the  interest  of  justice,  a  legal 


67 

title  is  held  to  relate  back  to  the  initiatory  step  for 
the  acquisition  of  the  land." 

The  case,  to  his  mind,  was  "one  coming  peculiarly 
within  the  principle  of  relation,  as  the  approval  of 
the  selections  manifestly  imported  that,  at  the  time 
of  the  application  for  selections,  the  land  in  ques- 
tion was  rightfully  claimed  by  the  applicant." 

"Nor  is  the  assertion  well  founded",  he  says, 
"that  this  case  is  not  a  proper  one  for  the  applica- 
tion of  the  doctrine  of  relation  because  coming 
within  the  rule  announced  in  United  States  v. 
Loughrey,  172  U.  S.  206.  At  the  time  of  the  tres- 
pass complained  of  in  that  case,  the  United  States 
had  taken  no  step  to  assert  its  reversionary  rights 
in  and  to  the  land  trespassed  upon,  the  legal  title 
to  which  was  in  the  State  of  Michigan  at  the  time 
the  trespass  was  committed.  Here  as  we  have  seen 
the  grantee  had  exercised  his  right  to  apply  for 
selections  within  the  indemnity  limits,  and  had  in 
legal  form  requested  the  approval  of  the  same  by 
the  Government.  Everything,  therefore,  which 
the  grantee  was  required  by  law  to  do,  to  obtain  the 
legal  title  had  been  performed.  These  facts  bring 
this  case  within  the  principle  decided  in  Heath  v. 
Ross,  12  Johns,  140,  and  Musser  v.  McRae,  44  Min- 
nesota, 343,  referred  to  in  the  opinion  of  the  court 
in  the  Loughrey  case,  (p.  218)  as  not  being  incon- 
sistent with  the  principle  there  applied.  Heath  v. 
Ross  was  an  action  of  trover  for  timber  cut  between 
the  application  for  and  date  of  a  patent  from  the 


68 

State,  and  its  ensealing  and  delivery  by  the  Sec- 
retary of  State.  The  title  was  held  to  relate  back 
to  the  first  act,  so  as  to  entitle  the  plaintiff  to  main- 
tain an  action  against  a  mere  wrongdoer,  for  the 
value  of  the  timber  cut  and  carried  away  in  the 
meantime.  Musser  v.  McRae  was  an  action  brought 
to  recover  the  value  of  timber  cut  by  trespassers 
from  indemnity  lands  selected  by  the  agent  of  cer- 
tain railroad  companies,  intermediate  the  applica- 
tion for  selection  and  the  patenting  of  the  lands. 
To  permit  a  recovery,  it  was  held  that  the  title 
evidenced  by  the  patent  related  back  at  least  to  the 
date  of  the  application  for  selection". 

"Concluding,  as  we  do",  Mr.  Justice  White  goes 
on,  "that  the  money  in  question  belongs  to  the  ap- 
pellee as  the  successor  in  interest  of  the  party  for 
whose  benefit  the  application  for  selections  was 
made,  it  results  that  the  judgment  of  the  Court  of 
Claims  must  be  affirmed." 

Howe  v.  Lowell,  decided  by  the  Supreme  Court 
of  Massachusetts,  August  30,  1898,  (171  Mass., 
576)  is  an  interesting  and  pertinent  case.  Howe 
had  granted  certain  land  to  the  City  of  Lowell,  but 
"on  the  express  condition  that  the  grantee  shall, 
within  three  years  from  the  date  hereof,  lay  out 
and  construct,  and  thereafter  forever  maintain,  a 
public  highway  over  the  within  described  premises 
at  least  fifty  feet  in  width,  having  the  northerly  line 
of  the  within  described  premises  as  the  northerly 
line  of  such  highway,  and  also  on  the  express  con- 


69 

dition  that  that  part  of  said  premises  not  taken  or 
used  for  said  highway  shall  be  improved,  dedi- 
cated, and  forever  used  by  the  said  grantee  as  and 
for  a  common,  park,  or  boulevard,  and  for  no  other 
purpose;"  and  it  was  added  for  good  measure  that 
in  the  event  of  a  breach  of  the  conditions,  the  deed 
should  be  absolutely  null  and  void,  and  the  prem- 
ises should  revert  to  and  revest  in  the  grantor, 
his  heirs  and  assigns,  as  fully,  completely  and  ef- 
fectually, as  if  these  presents  had  not  been  executed." 

It  may  be  glanced  at,  by  the  way,  that  the  grantor 
intended  to  keep  to  himself  a  certain  product  of  the 
granted  premises,  not  timber  or  minerals — it  was 
ice,  in  this  case, — and  he  took  care  to  say  so:  "The 
right  to  take  ice  on  the  Merrimack  River  where  it 
flows  over  the  premises  herein  conveyed  is  hereby 
expressly  reserved  to  the  grantors,  their  heirs  and 
assigns,  or  other  person  or  persons  who  now  have 
that  right". 

The  grantee  built  the  highway,  also  a  boulevard 
— so  far,  so  good,  but  it  went  farther.  In  1891, 
1892  and  1895,  the  City,  for  the  purpose  of  obtain- 
ing a  supply  of  water  by  means  of  artesian  wells, 
drove  a  number  of  iron  pipes,  two  and  a  half  inches 
in  diameter,  into  the  granted  land.  The  experi- 
ments of  1891  and  1892  were  not  productive  of 
water,  and  one  or  two  of  these  pipes  were  left  in 
the  ground.  Indeed,  in  1892,  the  ground  was  dug 
up  and  left  in  a  rough  condition,  one  or  two  pipes 
were  left  projecting  above  the  surface,  and  in  a 


70 

number  of  cases  where  the  pipes  were  removed,  the 
holes  were  not  filled  in,  so  that  it  was  hardly  safe 
to  walk  over  it;  some  trees  originally  on  the  land 
at  the  time  of  the  conveyance  were  destroyed,  and 
a  sluiceway  was  dug  to  carry  off  waste  water,  and 
refuse  coal  was  left  upon  the  ground.  In  1895,  the 
grantee  had  better  luck  with  its  borings,  and  a 
permanent  source  of  water  supply  was  developed  on 
the  land.  One  hundred  and  forty  pipes  in  all  were 
driven  into  the  ground.  So  much,  as  to  the  ex- 
plorations for  water,  and  so  much  as  to  the  pipes 
driven  into  the  land. 

On  one  of  the  granted  lots,  for  there  were  several, 
the  lot  known  as  lot  A,  the  city  put  up  an  engine 
house,  and  connected  the  engine  therein  by  a  large 
pipe  with  the  other  pipes,  140  in  number.  This 
large  pipe  carried  the  water  by  gravity  into  the  con- 
duit of  the  city.  The  opinion  of  the  court  deals  first 
and  separately  with  the  sunken,  sub-surface  pipes; 
and  next  with  the  upstanding  engine  house  and  plant 
on  lot  A.  This  engine  house  or  pumping  station — a 
pumping  station  for  supplying  the  inhabitants  of 
the  city  of  Lowell  with  water — the  court  had  no 
difficulty  in  resolving  as  a  breach  of  the  condition 
on  which  the  land  had  been  granted,  and  we  dis- 
miss the  pumping  plant  from  further  consideration. 
Now,  for  the  pipes.    Said  the  court : 

"As  the  highway  has  been  constructed,  the 
question  is  whether  there  has  been  a  breach  of 


71 

the  conditions  that  the  parts  of  the  premises 
not  taken  for  a  highway  'shall  be  improved, 
dedicated,  and  forever  used  by  the  grantee  as 
and  for  a  common,  park,  or  boulevard,  and  for 
no  other  purpose.'  The  title  in  fee  to  all  the 
parcels  vested  in  the  city  of  Lowell,  subject 
to  conditions  subsequent  by  the  breach  of  which 
its  title  would  be  divested,  and  would  revest  in 
the  grantors  and  their  heirs". 

The  court  then  refers  to  a  product  of  the  granted 
land — in  this  case,  the  subterranean  water — in  lan- 
guage that  would  be  just  as  apposite,  if  it  had  been 
spoken  of  timber,  or  of  coal,  or  of  iron. 

"The  subterranean  waters  in  the  parcels",  said 
the  court,  "were  a  part  of  the  parcels,  and  the 
grantors  in  the  deeds  have  not  reserved  to  them- 
selves the  property  in  these  waters ,  while  the  deeds 
are  in  force". 

Reference  is  made  to  the  Wellington  case,  16 
Pick.,  87,  99,  concerned  with  a  grant  of  certain  land 
to  the  town  of  Cambridge,  whereby  "the  same  is 
hereby  granted  to  the  town  of  Cambridge,  to  be  used 
as  a  training  field,  to  lie  undivided,  and  to  remain 
for  that  use  forever,  provided,  nevertheless,  that  if 
the  said  town  should  dispose  of,  grant,  or  appropri- 
ate the  same,  or  any  part  thereof,  at  any  time  here- 
after, to  or  for  any  other  use  than  that  aforemen- 
tioned, then,  and  in  such  case,  the  whole  of  the  prem- 
ises hereby  granted  to  the  said  town  shall  revert  to 
the  proprietors  granting  the  same". 


72 

The  language  of  the  Supreme  Court  of  Massa- 
chusetts, in  deciding  the  Wellington  case,  is  now 
quoted : 

"By  the  grant  the  town  became  owners  of 
the  soil  with  full  power,  as  such  owners,  to 
make  any  use  of  the  property  which  owners  of 
land  can  make,  subject  only  to  the  restraint  and 
limitation  expressed  in  the  condition.  All  such 
limitations  and  restrictions,  especially  those 
which  go  to  create  a  forfeiture,  are  to  be  con- 
strued strictly,  and  not  to  be  extended  beyond 
the  plain  terms  of  the  clauses  in  which  they 
are  expressed,  and  the  obvious  purposes  for 
which  they  are  introduced". 

But  the  trial  court,  in  Howe  against  Lowell,  had 
found  "that  the  use  of  the  land  for  the  purpose  of 
driving  wells  and  drawing  water  therefrom,  and 
the  erection  of  engines  and  boiler  houses,  were  uses 
and  purposes  not  in  the  minds  of  the  grantors  or 
even  of  the  grantee,  when  the  deeds  were  given". 
Of  this,  the  Supreme  Court  said: 

"As  the  grantee  took  the  lands  in  fee,  it  is 
entitled  to  make  any  use  of  the  lands  not  in 
violation  of  the  conditions  in  the  deeds,  whether 
the  parties  thought  of  it  or  not.  It  is  not  a  new 
use  to  lay  water  pipes  in  lands  taken  and  used 
as  a  highway.  Water  pipes  are  sometimes  laid 
in  and  through  commons  and  lands  taken  or 
purchased  for  a  public  park,  but  we  are  aware 
of  no  case  in  which  it  has  been  held  that  it  re- 
quires a  new  taking  to  do  this,  or  that  such  a 
laying  of  pipes  is  not  within  the  terms  of  the 


73 

deeds  granting  lands  for  these  purposes.  On 
the  theory  of  the  demandants,  the  subterranean 
waters  of  the  lands  cannot  be  used  by  the  city 
without  forfeiting  the  lands,  and  cannot  be 
used  by  themselves  because  they  have  not  re- 
served the  waters  or  excepted  them  from  the 
grant" 

It  was  accordingly  held  "that  the  construction  and 
maintenance  of  the  system  of  pipes  did  not  consti- 
tute a  breach  of  the  conditions  in  the  deeds. 

Upon  this  question  of  timber  and  the  rights  of  the 
owner  of  a  fee  therein  or,  more  largely  speaking, 
upon  the  question  of  waste,  to  use  the  old  common 
law  term — the  case  of  Landers  v.  Landers,  151  Ky., 
at  pages  215-217,  gives  an  instructive  summary  of 
the  law,  and  with  special  reference,  in  that  case,  to 
a  defeasible  fee.  We  think  it  may  be  convenient  at 
this  place  to  make  the  quotation : 

"The  next  question  to  be  determined  is 
whether  or  not  plaintiffs  may  recover  damages 
from  the  estate  of  Bryant  Landers  for  the  tim- 
ber cut  and  removed  by  him  from  the  170  acres 
of  land  devised  to  him  by  John  Landers,  and  in 
which  he  owned  only  a  defeasible  fee.  Our 
statute  on  the  subject  does  not  cover  a  de- 
feasible fee,  so  recourse  must  be  had  to  the  com- 
mon law.  In  2  Blackstone,  page  282,  we  find 
the  following : 

'Let  us  next  see  who  are  liable  to  be  pun- 
ished for  committing  waste.  And  by  the  feudal 
law,   feuds  being  originally  granted   for  life 


74 

only,  we  find  that  the  rule  was  general  for  all 
vassals  or  feudatories:  "si  vassalus  feudum 
dissipaverit,  aut  insigni  detrimento  deterius 
fecerit,  privabitur."  But  in  our  ancient  com- 
mon law  the  rule  was  by  no  means  large;  for 
not  only  he  that  was  seized  of  an  estate  of  in- 
heritance might  do  as  he  pleased  with  it,  but 
also  waste  was  not  punishable  in  any  tenant 
save  only  in  three  persons:  guardian  in  chiv- 
alry, tenant  in  dower,  and  tenant  by  the  cur- 
tesy; and  not  in  tenant  for  life  or  years;  and 
the  reason  of  the  diversity  was,  that  the  estate 
of  the  three  former  was  created  by  the  act  of 
the  law  itself,  which  therefore  gave  remedy 
against  them ;  but  tenant  for  life,  or  for  years, 
came  in  by  the  demise  and  lease  of  the  owner 
of  the  fee,  and  therefore  he  might  have  pro- 
vided against  the  committing  of  waste  by  his 
lessee;  and,  if  he  did  not,  it  was  his  own  de- 
fault. But,  in  favor  of  the  owners  or  the  in- 
heritance, the  statutes  of  Marlbridge,  52  Hen. 
Ill,  c.  23,  and  of  Gloucester,  6  Edw.  I,  c.  5,  pro- 
vided that  the  writ  of  waste  shall  not  only  lie 
against  tenants  by  the  law  of  England  (or  cur- 
tesy), and  those  in  dower,  but  against  any 
farmer  or  other  that  holds  in  any  manner  for 
life  or  years.  So  that  for  above  five  hundred 
years  past,  all  tenants  merely  for  life,  or  for 
any  less  estate,  have  been  punishable  or  liable 
to  be  impeached  for  waste  both  voluntary  and 
permissive;  unless  their  leases  be  made,  as 
sometimes  they  are,  without  impeachment  for 
waste,  absque  impetitione  vasti;  that  is,  with  a 


75 

provision  or  protection  that  no  man  shall  ira- 
petere,  or  sue  him  for  waste,  committed.  But 
tenant  in  tail  after  possibility  of  issue  extinct 
is  not  impeachable  for  waste ;  because  his  estate 
was  at  its  creation  an  estate  of  inheritance, 
and  so  not  within  the  statutes.  Neither  does 
an  action  of  waste  lie  for  the  debtor  against 
tenant  by  statute,  recognizance,  or  elegit;  be- 
cause against  them  the  debtor  may  set  off  the 
damages  in  account;  but  it  seems  reasonable 
that  it  should  lie  for  the  reversioner,  expectant 
on  the  determination  of  the  debtor's  own  estate, 
or  of  those  estates  derived  from  the  debtor.' 

"The  proprietor  of  a  qualified  or  base  fee  has 
the  same  rights  and  privileges  over  his  estate, 
till  the  contingency  upon  which  it  is  limited  oc- 
curs, as  if  he  were  tenant  in  fee  simple.  Wal- 
singham's  case,  Plowd., — Chitty." 

"In  Weed  v.  Woods,  71  N.  H.  581,  it  was  held 
that  where  a  deed  reserves  to  a  grantor  a  cer- 
tain portion  of  the  premises  so  long  as  a  re- 
ligious association  may  want  it,  the  estate  re- 
tained is  a  qualified  or  determinable  fee;  and 
during  its  continuance  the  grantor  and  his  suc- 
cessors in  title,  while  they  retain  possession, 
have  all  the  rights  of  tenants  in  fee  simple. 

"Mr.  Washburn,  in  his  treatise  on  real  prop- 
erty, 4th  edition,  volume  1,  page  89,  section  86, 
in  speaking  of  the  incidents  of  a  determinable 
fee,  says : 

'So  long  as  the  estate  in  fee  remains  the 
owner  in  possession  has  all  the  rights  in  re- 
spect to  it  which  he  would  have  if  tenant  in  fee 
simple,  unless  it  be  so  limited  that  there  is 


76 

properly  a  reversionary  right  in  another — 
something  more  than  a  possibility  or  reverter 
belonging  to  a  third  person,  when,  perhaps, 
chancery  might  interpose  to  prevent  waste  of 
the  premises.' 

"In  Gannon  v.  Peterson,  55  L.  R.  A.  701, 
193  111.  372,  it  was  held  that  the  opening  of 
mines,  and  the  mining  of  coal  by  the  owner  of  a 
determinable  fee  in  property  of  which  the  coal 
constituted  the  chief  value,  was  not  such  waste 
as  could  be  enjoined  by  the  owners  of  the  ex- 
pectancy, who  claimed  under  an  executory  de- 
vise— at  least  where  it  is  not  made  to  appear 
that  the  contingency  which  would  determine 
the  fee  was  reasonably  certain  to  happen.  In 
discussing  the  question  the  court  said : 

'The  authorities  are  uniform  as  to  the  defini- 
tion, duration,  and  extent  of  a  base  or  deter- 
minable fee.  They  are  agreed  that  it  is  a  fee 
simple  estate ;  not  absolute,  but  qualified.  Upon 
the  death  of  the  donee,  his  widow  has  dower, 
although  the  contingency  may  have  happened 
that  defeats  the  estate,  and  that  within  the  gen- 
eral acceptation  and  meaning  of  the  term  the 
person  seized  of  such  an  estate  is  not  charge- 
able with  waste.' 

"The  only  exception  to  this  rule  is  that  equity 
will  sometimes  restrain  equitable  waste.  Equit- 
able waste  is  defined  by  Mr.  Justice  Story  to 
consist  of  'such  acts  as  at  law  would  not  be  es- 
teemed to  be  waste  under  the  circumstances  of 
the  case,  but  which,  in  the  view  of  a  court  of 
equity,  are  so  esteemed  from  their  manifest 
injury  to  the  inheritance,  although  they  are  not 


77 

inconsistent  with  the  legal  rights  of  the  party 
committing  them.'  2  Story  Eq.  Jur.,  sec.  915. 
The  same  author  further  says:  'In  all  such 
cases  the  party  is  deemed  guilty  of  a  wanton 
and  unconscientious  abuse  of  his  rights,  ruin- 
ous to  the  interests  of  other  parties.'  Lord 
Chancellor  Campbell,  in  Turner  v.  Wright,  6 
Jur.  N.  S.,  809,  29  L.  J.  Ch.  N.  S.,  598,  defines 
equitable  waste  to  be  'that  which  a  prudent  man 
would  not  do  with  his  own  property.' 

"Even  if  an  action  for  damages  would  lie  for 
equitable  waste,  a  question  not  decided,  there 
is  nothing  in  the  record  before  us  to  show  that 
Bryant  Landers  was  guilty  of  such  waste. 

It  does  not  appear  that  he  was  guilty  of  a 
wanton  and  unconscientious  abuse  of  his  rights, 
or  that  he  did  that  which  a  prudent  man  would 
not  do  with  his  own  property.  We,  therefore, 
conclude  that  the  action  for  waste  was  prop- 
erly dismissed." 

The  historical  and  interesting  case  of  Attorney 
General  against  Duke  of  Marlborough,  3  Madd., 
498,  turned  on  the  right  of  a  tenant  in  tail  to  cut 
timber  on  the  granted  estate.  Blenheim  House  and 
the  Manor  of  Woodstock  had  been  granted  in  fee  tail 
to  the  great  Duke — a  nation's  reward  to  the  victor 
of  Blenheim.  Tenancy  in  tail,  like  the  tenure  of  a 
railroad  land  grant,  is  of  statutory  origin.  It  origi- 
nated, as  will  be  recalled,  in  the  Statute  De  Donis 
Conolitionalibus,  designed  to  restrain  the  alienation 
of  conditional  fees — limited,  for  example,  to  the  ten- 


78 

ant  and  heirs  of  his  body — alienations  which  tenants 
had  been  practicing  freely  to  the  alleged  prejudice 
of  their  issue  and  of  the  lord  in  reversion.  The 
statute  restrained  the  power  of  alienation  except, 
as  by  amendment  was  afterwards  permitted,  to  the 
extent  of  certain  leases;  it  entailed  the  estate 
strictly.  But  like  some  other  celebrated  statutes, — 
the  Statute  of  Uses,  for  instance  the  Statute  De 
Donis  Conditionalibus  was,  in  time,  over-reached 
— by  the  process  of  fine  and  recovery,  and  the  ten- 
ant was  enabled  to  bar  the  entail  and  clothe  him- 
self with  a  fee  absolutely.  It  was  well  settled  that 
a  tenant  in  tail — even  a  tenant  in  tail  after  the  pos- 
sibility of  issue  extinct,  was  dispunishable  for  waste. 
But  the  Blenheim  granting  act  went  beyond  the 
Statute  De  Donis,  and  industriously  and  in  very 
clear  terms  forbade  the  barring  of  the  entail. 

The  defendant,  Duke  of  Marlborough,  in  the  case 
now  cited,  was  in  by  a  fee  simple  title,  but  it  was  a 
fee  tail  in  the  strictest  sense,  a  fee  simple  to  which 
a  restraint  upon  alienation  was  attached  beyond 
circumvention.  Did  he  have  the  right  to  cut  the 
timber  on  the  entailed  estate  and  apply  its  proceeds 
to  his  own  use? — that  was  the  question  before  Sir 
John  Leach.    We  quote  from  the  opinion : 

"That  an  ordinary  tenant  in  tail  may,  at  his 
pleasure,  cut  down  all  timber  for  whatever  pur- 
poses planted,  admits  of  no  question,  and  it  is 
hardly  necessary  to  advert  to  the  origin  of  that 
particular  species  of  tenure.     It  grew  out  of 


79 

the  ancient  conveyances  to  a  man,  and  to  the 
heirs  of  his  body.  Under  such  a  conveyance,  it 
was  held  at  common  law,  that  until  issue  born, 
he  had  not  the  absolute  property  in  the  estate, 
it  being  limited  by  the  grant,  not  to  his  gen- 
eral heir,  but  to  the  heirs  of  his  body;  but  that 
the  moment  issue  was  born,  the  condition  being 
performed,  the  estate  became  absolutely  his 
property,  and  he  could  dispose  of  it  in  the  same 
manner  as  if  he  had  held  it  in  fee  simple.  The 
legislature,  however,  thought  fit  to  interfere, 
and  by  the  Statute  of  Westminster,  the  Second 
(commonly  called  the  Statute  De  Donis,  13 
Edward  I  c.  1.)  it  was  declared,  that  the  Will 
of  the  Donor  or  Grantor  should  be  observed, 
and  that  an  estate  so  granted  to  a  man  and  the 
heirs  of  his  body,  should  descend  to  the  issue, 
and  that  he  should  not  have  power  to  alienate 
the  estate.  In  the  construction  of  that  Act  of 
Parliament,  it  was  held,  that  a  tenant  in  tail 
remained  with  the  same  unqualified  and  abso- 
lute ownership  of  his  estate,  as  he  had  before 
that  statute,  with  the  single  exception  of  the 
restraint  on  alienation.  In  that  restraint  of 
alienation  was  included,  alienation  by  lease; 
leases  being  considered,  according  to  the  con- 
struction of  that  statute,  as  partial  alienations ; 
but  by  subsequent  statute  of  the  32  Hen.  VIII 
c.  28,  a  tenant  in  tail  is  permitted  to  make 
certain  leases  mentioned  in  that  statute.  With 
the  exception,  therefore,  of  alienation  including 
leases,  unless  according  to  the  Statute,  a  tenant 
in  tail  is  at  this  day  to  be  considered  as  much 


80 

the  absolute  owner  of  the  estate  as  a  tenant  in 
fee  simple,  and  as  such,  may  do  what  he  pleases 
with  the  buildings  and  timber  on  the  estate." 

Sir  John  Leach  now  takes  up  the  provision  of  the 
granting  act,  by  which  the  barring  of  the  entail  was 
forbidden.  "In  the  first  place,"  he  says,  "it  is  to  be 
observed  that  this  is  an  express  admission  by  the 
legislature  that  the  estate  conferred  upon  the  issue 
of  the  Duke  of  Marlborough,  by  the  previous  limita- 
tions, was  an  estate  capable  of  being  barred  by  fine 
or  recovery,  or  in  other  words,  was  an  estate  tail,  to 
which  alone  the  bar  by  fine  or  recovery  is  applicable ; 
and  this  provision  is,  therefore,  nothing  more  than  a 
declaration  on  the  part  of  the  legislature,  that  the 
estate  tail,  given  to  the  issue  of  the  Duke  of  Marl- 
borough, should,  in  this  respect,  lose  one  of  the  inci- 
dents which  belong  to  it,  by  the  principles  of  law, 
namely,  the  power  of  barring  the  entail  by  fine  or 
recovery;  and  necessarily,  therefore,  leaving  every 
tenant  in  tail  in  possession  with  every  other  legal 
incident,  which  belongs  to  the  nature  of  his  estate, 
and  consequently,  leaving  him  as  much  the  absolute 
owner  of  the  timber  and  buildings  on  the  estate,  as 
if  he  were  tenant  in  fee  simple." 

The  court  notices,  by  way  of  contrast,  the  case  of 
tenant  for  life,  as  to  which  "it  is  to  be  observed  that 
the  ownership  of  the  timber  is  not  a  legal  incident  to 
the  estate  of  tenant  for  life" ;  and  as  to  a  tenant  in 
tail,  after  possibility  of  issue  extinct,  it  is  said  that 


81 

he  is,  "in  effect  a  tenant  for  life,  without  impeach- 
ment of  waste." 

Sir  John  Leach  finally  calls  attention  to  a  statute 
of  the  5th  Anne,  c.  4,  not  noticed  in  the  pleadings  or 
argument,  and  making  a  settlement  of  five  thou- 
sand pounds  a  year  on  the  Duke's  posterity,  "for  the 
more  honorable  support  of  their  dignities  in  like 
manner  as  his  honors  and  the  honor  and  manor  of 
Woodstock  and  the  House  of  Blenheim  were  already 
limited  and  settled." 

"I  cannot  read  these  several  acts,"  says  Sir  John 
Leach,  "and  attend  to  the  circumstances  of  this  prop- 
erty and  observe  the  manner  and  purpose  of  build- 
ing this  house  of  Blenheim,  and  the  special  annexa- 
tion of  it  to  the  honors  and  dignities  of  this  family, 
as  was  particularly  recited  in  the  last  act,  without 
stating  that  there  appears  to  me  to  be  clear  and 
necessary  implication  that  it  was  the  intention  of 
the  legislature  that  the  House  of  Blenheim  should, 
in  all  times,  as  a  distinct  subject,  descend  and  be 
enjoyed  with  the  honors  and  dignities  of  this  family, 
and  that  it  was  not  the  intention  of  the  legislature 
that  the  successive  possessors  of  these  honors  and 
dignities,  should  have  the  rights  of  property  over  it, 
which,  with  respect  to  the  rest  of  the  estate,  were 
legally  incident  to  their  character  of  tenant  in  tail. 
I  think  the  legislature  thus  imposed  upon   every 
possessor  of  these  honors  and  dignities  the  obliga- 
tion to  maintain  the  House  of  Blenheim  for  the 
future  residence  of  those  to  whom  the  succession 


82 

was  limited;  and  that  this  court  is  bound  to  inter- 
fere to  prevent  its  destruction.  I  am  clearly  of 
opinion  that  the  Duke  of  Marlborough,  having  no 
power  of  destruction  over  the  house  has  no  power  of 
destruction  over  the  timber  which  is  essential  to 
the  shelter  or  ornament  of  the  house." 

Intrinsic  and  Corroborative  Evidence  of  the 
Granting   Acts   Themselves. 

We  have  had  occasion,  in  citing  Howe  against 
Lowell,  171  Mass.  pp.  582-3,  to  quote,  inter  alia, 
this  language: 

"As  the  grantee  took  the  lands  in  fee,  it  is 
entitled  to  make  any  use  of  the  lands  not  in 
violation  of  the  conditions  in  the  deeds,  whether 
the  parties  thought  of  it  or  not." 

Something,  now,  as  to  the  granting  acts  in  the 
case  at  bar,  and  as  to  the  timber  and  the  minerals — 
and  whether  the  parties  thought  of  these  things  or 
not. 

"As  a  rule  of  construction,"  this  court  has  held 
(Blair  against  Chicago,  201  U.  S.  p.  475),  "a  statute 
amended  is  to  be  understood  in  the  same  sense  ex- 
actly, as  if  it  had  read  from  the  beginning  as  it 
does  amended." 

The  Act  of  July  25,  1866,  is,  therefore,  to  be  read 
as  if  it  had  contained  the  settlers'  clause  from  the 
beginning;  the  act  of  May  4,  1870  had  the  settlers' 
clause  in  it  when  originally  passed. 

Congress,  when  it  attached  to  the  otherwise  un- 
qualified estate  of  the  grantee  the  covenant  found  in 


83 

the  settlers'  clause,  and  when  it  made  the  grant  it- 
self, did  think  of  some  things — of  some  limitations 
or  of  some  limitation  upon  the  estate,  but  that  limi- 
tation did  not  include  the  timber  upon  the  lands 
granted.  There  was  something  in  the  lands  granted 
— a  product  or  component  of  the  soil — which  Con- 
gress did  think  of  and  which  Congress  expressly  and 
pointedly  excepted  out  of  the  estate,  and  that  was 
the  mineral  therein. 

The  original  act  of  July  25,  1866,  in  Section  10 
thereof,  reads  as  follows: 

"And  be  it  further  enacted,  That  all  mineral 
lands  shall  be  excepted  from  the  operation  of 
this  act;  but  when  the  same  shall  contain  tim- 
ber, so  much  of  the  timber  thereon  as  shall  be 
required  to  construct  said  road  over  such  min- 
eral land  is  hereby  granted  to  said  companies: 
Provided,  that  the  term  'mineral  lands'  shall 
not  include  lands  containing  coal  and  iron." 
The  act  of  May  4,  1870,  Section  1,  grants 

"each  alternate  section  of  the  public  lands, 
not  mineral,  excepting  coal  or  iron  lands,  desig- 
nated by  odd  numbers  nearest  to  said  road, 
to  the  amount  of  ten  such  alternate  sections  per 
mile,  on  each  side  thereof." 

It  is  thus  seen  that  Congress  expressly  dealt  with 
the  mineral  contents  of  the  lands  granted  by  the  act 
of  1866,  and  indeed,  in  an  express  but  partial  way, 
with  the  timber  thereon;  but  the  Congressional  ex- 
ception conspicuously  includes  in  its  limitation  of 
the  grant  only  such  timber  as  there  shall  be,  not  on 


84 

the  granted  lands,  but  on  the  excluded  mineral 
lands,  and  even  as  to  such  excepted  timber  the  com- 
pany is  accorded  the  right  to  use  so  much  as  shall 
be  necessary  "to  construct  said  road  over  such  min- 
eral land."  Again,  in  the  act  of  1870,  the  minerals, 
in  distinction  from  the  timber,  are  expressly  ex- 
cluded from  the  operation  of  the  grant.  And  more 
than  that,  and  in  both  acts,  even  in  the  exception  of 
the  minerals,  it  is  provided  that  such  exception 
shall  not  include  coal  and  iron — a  plain  recognition 
of  the  grantee's  right  to  the  coal  and  to  the  iron  ex- 
isting in  the  granted  lands ;  and  yet,  in  the  decree  as 
signed  by  the  District  Court,  it  seems  not  to  have 
been  enough  to  exclude  our  right  to  the  timber  of 
the  non-mineral,  unexcepted  and  granted  sections, 
but  all  mineral  deposits,  including,  therefore,  the 
coal  and  iron,  are  excluded  by  the  terms  of  the  de- 
cree. 

The  settlers'  proviso,  under  the  familiar  rule  of 
construction,  amendment  though  it  was,  must  be 
read  with  the  rest  of  the  grant,  as  if  it  had  been 
there  from  the  first  beginning.  It  must  be  read  con- 
sistently and  harmoniously  with  the  rest  of  the  act; 
and  it  must  be  read  in  the  light  of  the  time  and  the 
environment  in  which  it  was  passed,  not  by  the  wis- 
dom that  comes  after  the  event;  (U.  S.  v.  U.  P.  RR., 
91  U.  S.,  72,  81)  not  with  a  perverted  purpose  to 
turn  a  settlement  act  into  a  timber  and  stone  act.  It 
never  entered  the  head  of  the  man  who  wrote  these 
granting  acts,  or  of  the  men  who  voted  for  them, 


85 

that  the  railroad  company  had  no  right  in,  or  use 
for  all  this  timber,  or  coal,  or  iron,  except  to  sell  it 
to  settlers — as  if  the  settlers  wanted  it.  The  gro- 
tesque incongruity  of  the  thing  is  not  to  be  im- 
puted to  the  legislature.  It  was  settlement  land 
that  was  contemplated  by  the  provisos — arable  land, 
tillable  by  settlers. 

The  timber,  cleared  off  and  out  of  the  way,  to 
make  place  for  the  settler,  the  coal,  the  iron, — that 
went  with  the  grant,  to  the  owner  of  the  land. 
(United  States  against  Losekamp,  127  Fed.  959) 
The  grantor  itself,  in  1878,  as  the  opinion  of  this 
court  notices,  took  its  own  lands,  lying  within  the 
circumscription  of  the  grant,  its  even  numbered  sec- 
tions, out  of  the  settlement  laws  and  put  them  under 
the  timber  and  stone  act.  And  the  Ferris  Act  is  an 
object  lesson ;  it  first  clears  and  sells  the  timber  and 
then  offers  the  land  for  settlement. 

It  is  not  of  moment,  as  said  in  the  Massachusetts 
case  of  Howe  v.  Lowell,  supra,  whether  the  parties 
thought  of  the  timber  or  not.  But  Congress  did 
think  of  the  timber,  and  it  thought  of  the  minerals, 
and  it  dealt  with  the  timber  and  with  the  minerals 
in  a  way  to  make  it  convincingly  evident  that  so  far 
as  the  granted  lands  were  concerned,  no  limitation 
upon  the  estate  of  the  grantee  in  respect  to  the  tim- 
ber, or  in  respect  to  the  coal  or  iron,  was  contem- 
plated or  imposed.  And  now,  as  to  the  patented 
lands,  all  minerals  therein  found — not  coal  and  iron 
only — are,  by  force  of  the  patent,  the  property  and 


86 

estate  of  the  patentee.  (Burke  v.  S.  P.  R.  R.,  234 
U.  S.,  669).  The  case  at  bar  is  a  revealing  in- 
stance of  that  canon  of  construction — the  rule  of 
expressio  unius — which  this  court  invoked  and  ap- 
plied in  passing  upon  the  question  of  a  condition 
subsequent.  For  it  will  be  remembered  that  the 
opinion  of  the  court  contrasts  the  expressed  penal- 
ties of  reverter  and  forfeiture,  attached  by  Congress 
to  failure  on  the  part  of  the  grantee  to  construct  the 
railroad  within  the  prescribed  time,  or  to  file  its  as- 
sent within  the  prescribed  time,  over  against  the  ab- 
sence of  such  penalties  or  of  any  penalty  from  the 
provisos  in  which  the  settlers'  clause  is  contained. 

So  much  for  the  rights  of  the  grantee  to  the  lands, 
which  it  contracted  for,  earned  and  paid  for,  and  to 
the  timber,  the  coal,  the  iron,  or  other  mineral  con- 
tent. 

-  It  appeared  from  the  record  which  this  court  had 
before  it  on  the  first  appeal,  (Vol.  13,  pp.  6836-7) 
that  the  company  had  been  under  an  expense,  in  ad- 
ministering the  grant  from  April  1,  1870  to  April 
30,  1911,  of  $1,184,542.84;  that  it  had  paid  the 
taxes  on  the  granted  lands  to  1910  inclusive,  that 
taxes  had  been  levied  on  the  lands  for  the  year  1911, 
and  that  during  the  more  recent  years  of  the  above 
period,  taxes  had  been  levied  upon  an  assessed  valu- 
ation in  excess  of  $2.50  per  acre — ranging  from 
$2.96  per  acre  up  to  $10.32  per  acre— the  taxes  so 
paid  and  levied  amounting  to  $2,434,843.33  (Vol. 
5,  pp.  2567  et  seq.) ;  making  a  total  administration 


87 

expense,  including  taxes,  of  $3,619,386.17.  The 
total  cash  receipts  from  all  sources,  April  1,  1870  to 
April  30,  1911,  including  sales  of  land  (Vol.  13,  pp. 
6836-7)  are  stated  to  be  $5,488,020.72.  This  leaves 
the  company  a  net  revenue  from  past  transactions 
up  to  April  30,  1911,  over  and  above  expenses  paid 
and  taxes  levied,  of  $1,868,634.55.  The  average  net 
revenue  per  acre  for  the  lands  sold,  aggregating 
some  820,000  acres  (Vol.  4,  p.  1578)  figured  up  to 
April  30,  1911,  on  the  basis  of  the  above  items,  was 
$2.27. 

The  grant  obligated  the  company  to  carry  free 
for  the  United  States  government  its  property  and 
troops,  without  limit  as  to  time.  The  value  of  this 
free  transportation,  at  the  regular  rates  and  com- 
puted for  the  service  over  the  company's  line  in 
Oregon  between  1882  and  1911  inclusive,  is  $1,894,- 
970.09  (Vol.  13,  pp.  6835-6,  and  computation  based 
thereon).  This  amount  is  in  excess  of  the  receipts 
of  the  company,  hereinabove  mentioned  by  $26,- 
335.54.  And  if  these  figures  could  be  carried  down 
to  date,  the  deficit  would  be  largely  increased,  and 
further  the  average  net  revenue,  above  indicated,  of 
$2.27  per  acre  for  the  land  sold,  would  be  expressed 
by  a  much  diminished  figure. 

II. 

THE  FERRIS  ACT  IS  INVALID. 

In  the  statement  with  which  this  brief  opens  (pp. 
1-12  ante)  the  salient  and  pertinent  provisions  of 


88 

the  Ferris  Act  were  given  succinctly.    We  print  the 
act  in  full  as  an  appendix  to  this  brief. 

The  protection  of  vested  property  rights  has  been 
a  constitutional  guaranty  and  bulwark  from  the  be- 
ginning. 

Said  Chief  Justice  Marshall,  speaking  of  a  legis- 
lative grant,  which  the  legislature,  by  a  subsequent 
statute  sought  to  resume, —  (Fletcher  v.  Peck,  6 
Cranch,  p.  135) : 

"Is  the  power  of  the  legislature  competent  to 
the  annihilation  of  such  title,  and  to  a  resump- 
tion of  the  property  thus  held?  The  principle 
asserted  is,  that  one  legislature  is  competent  to 
repeal  any  act  which  a  former  legislature  was 
competent  to  pass ;  and  that  one  legislature  can- 
not abridge  the  powers  of  a  succeeding  legis- 
lature. The  correctness  of  this  principle,  so 
far  as  respects  general  legislation,  can  never  be 
controverted.  But,  if  an  act  be  done  under  a 
law,  a  succeeding  legislature  cannot  undo  it. 
The  past  cannot  be  recalled  by  the  most  abso- 
lute power.  Conveyances  have  been  made, 
those  conveyances  have  vested  legal  estates, 
and,  if  those  estates  may  be  seized  by  the  sover- 
eign authority,  still,  that  they  originally  vested 
is  a  fact,  and  cannot  cease  to  be  a  fact.  When, 
then,  a  law  is  in  its  nature  a  contract,  when 
absolute  rights  have  vested  under  that  contract, 
a  repeal  of  the  law  cannot  divest  those  rights; 
and  the  act  of  annulling  them,  if  legitimate,  is 
rendered  so  by  a  power  applicable  to  the  case  of 
every  individual  in  the  community." 


89 

The  same  great  judge,  in  Terrett  v.  Taylor,  9 
Cranch,  p.  50,  is  again  speaking  of  a  legislative 
grant  and  its  attempted  repeal:  "If  the  legisla- 
ture," he  says,  "possessed  the  authority  to  make  such 
a  grant  and  confirmation,  it  is  very  clear  to  our 
minds,  that  it  vested  an  indefeasible  and  irrevoc- 
able title.  We  have  no  knowledge  of  any  authority 
or  principle  which  could  support  the  doctrine,  that  a 
legislative  grant  is  revocable  in  its  own  nature,  and 
held  only  durante  bene  placito.  Such  a  doctrine 
could  uproot  the  very  foundations  of  almost  all  the 
land-titles  in  Virginia,  and  is  utterly  inconsistent 
with  a  great  and  fundamental  principle  of  a  repub- 
lican government,  the  right  of  the  citizens  to  the 
free  enjoyment  of  their  property  legally  acquired." 

In  Wilkinson  against  Leland,  2  Peters,  627,  657-8, 
Mr.  Justice  Storey  refers  to  Terrett  v.  Taylor, 
supra,  in  language  which  has  become  one  of  the  tra- 
ditions of  this  court:  "In  Terrett  v.  Taylor,  9 
Cranch  43,"  he  says,  "it  was  held  by  this  court,  that 
a  grant  or  title  to  lands,  once  made  by  the  legisla- 
ture, to  any  person  or  corporation,  is  irrevocable,  and 
cannot  be  re-assumed  by  any  subsequent  legislative 
act;  and  that  a  different  doctrine  is  utterly  incon- 
sistent with  the  great  and  fundamental  principle  of 
a  republican  government,  and  with  the  right  of  the 
citizens  to  the  free  enjoyment  of  their  property  law- 
fully acquired.  We  know  of  no  case,  in  which  a 
legislative  act  to  transfer  the  property  of  A.  to  B., 
without  his  consent,  has  ever  been  held  a  constitu- 


90 

tional  exercise  of  legislative  power,  in  any  state  in 
the  Union.  On  the  contrary,  it  has  been  constantly 
resisted,  as  inconsistent  with  just  principles,  by 
every  judicial  tribunal  in  which  it  has  been  at- 
tempted to  be  enforced." 

"It  seems  to  us,"  said  Mr.  Justice  Miller,  carry- 
ing on  the  tradition,  (Davidson  v.  New  Orleans,  96 
U.  S.,  97,  102)  "that  a  statute  which  declares  in 
terms,  and  without  more,  that  the  full  and  ex- 
clusive title  of  a  described  piece  of  land,  which  is 
now  in  A.,  shall  be  and  is  hereby  vested  in  B.,  would, 
if  effectual,  deprive  A.  of  his  property  without  due 
process  of  law,  within  the  meaning  of  the  constitu- 
tional provision." 

In  this  fundamental  matter,  the  opinions,  prevail- 
ing and  dissenting,  in  the  Sinking  Fund  Cases  (99 
U.  S.,  700)  are  at  one.  In  the  prevailing  opinion 
by  Mr.  Chief  Justice  Waite,  it  is  said:    (p.  718) 

"The  United  States  cannot  any  more  than  a 
State  interfere  with  private  rights,  except  for 
legitimate  governmental  purposes.  They  are 
not  included  within  the  constitutional  prohibi- 
tion which  prevents  States  from  passing  laws 
impairing  the  obligation  of  contracts,  but 
equally  with  the  States  they  are  prohibited 
from  depriving  persons  or  corporations  of  prop- 
erty without  due  process  of  law.  They  cannot 
legislate  back  to  themselves,  without  making 
compensation,  the  lands  they  have  given  this 
corporation  to  aid  in  the  construction  of  its 
railroad.    Neither  can  they  by  legislation  com- 


91 

pel  the  corporation  to  discharge  its  obligations 
in  respect  to  the  subsidy  bonds  otherwise  than 
according  to  the  terms  of  the  contract  already 
made  in  that  connection.  The  United  States 
are  as  much  bound  by  their  contracts  as  are 
individuals.  If  they  repudiate  their  obliga- 
tions, it  is  as  much  repudiation,  with  all  the 
wrong  and  reproach  that  term  implies,  as  it 
would  be  if  the  repudiator  had  been  a  State  or 
a  municipality  or  a  citizen.  No  change  can  be 
made  in  the  title  created  by  the  grant  of  the 
lands,  or  in  the  contract  for  the  subsidy  bonds, 
without  the  consent  of  the  corporation.  All  this 
is  indisputable." 

To  the  same  effect  is  the  dissenting  opinion  of 
Mr.  Justice  Strong:     (p.  731) 

"As  was  said  by  Mr.  Hamilton  in  his  cele- 
brated communication  to  the  Senate  of  Jan. 
20,  1795,  'when  a  government  enters  into  a 
contract  with  an  individual,  it  deposes,  as  to 
the  matter  of  the  contract,  its  constitutional 
authority,  and  exchanges  the  character  of  legis- 
lator for  that  of  a  moral  agent,  with  the  same 
rights  and  obligations  as  an  individual.  Its 
promises  may  be  justly  considered  as  excepted 
out  of  its  power  to  legislate,  unless  in  aid  of 
them.  It  is  in  theory  impossible  to  reconcile  the 
idea  of  a  promise  which  obliges,  with  a  power 
to  make  a  law  which  can  vary  the  effect  of  it.' 
3  Hamilton's  Works,  518,  519.  Opinions  simi- 
lar to  this  have  often  found  expression  in  ju- 
dicial decisions,  even  in  those  of  this  court.    If 


92 

this  be  sound  doctrine,  it  is  as  much  beyond  the 
power  of  a  legislature,  under  any  pretence,  to 
alter  a  contract  into  which  the  government  has 
entered  with  a  private  individual,  as  it  is  for 
any  other  party  to  a  contract  to  change  its 
terms  without  the  consent  of  the  person  con- 
tracting with  him.  As  to  its  contract,  the  gov- 
ernment in  all  its  departments  has  laid  aside 
its  sovereignty,  and  it  stands  on  the  same  foot- 
ing with  private  contractors." 

And,  again,  renewing  the  tradition,  he  says:  (p. 
738) 

"A  statute  undertaking  to  take  the  property 
of  A.  and  transfer  it  to  B.  is  not  legislation.  It 
would  not  be  a  law.  It  would  be  a  decree  or 
sentence,  the  right  to  declare  which,  if  it  exists 
at  all,  is  in  the  Judicial  Department  of  the  gov- 
ernment.,, 

"A  power  of  Congress,"  said  Mr.  Justice  Bradley, 
in  his  dissent,  (p.  744)  "even  over  those  subjects 
upon  which  it  has  the  right  to  legislate,  is  not  des- 
potic, but  is  subject  to  certain  constitutional  limi- 
tations. One  of  these  is,  that  no  person  shall  be  de- 
prived of  life,  liberty,  or  property  without  due  pro- 
cess of  law;  another  is,  that  private  property  shall 
not  be  taken  for  public  use  without  just  compensa- 
tion; and  a  third  is,  that  the  judicial  power  of  the 
United  States  is  vested  in  the  supreme  and  inferior 
courts,  and  not  in  Congress." 

He  says  further,  in  language  that  hits  the  Ferris 
Act  like  a  prophecy:   "Under  the  English  Constitu- 


93 

tion,  notwithstanding  the  theoretical  omnipotence 
of  Parliament,  such  a  law  as  the  one  in  question 
would  not  be  tolerated  for  a  moment.  The  famous 
denunciation  that  'it  would  cut  every  Englishman  to 
the  bone/  would  be  promptly  reiterated."  (p.  746) 
In  the  dissenting  opinion  of  Mr.  Justice  Field  (p. 
757),  it  is  said: 

"When  the  road  was  completed  in  the  man- 
ner prescribed  and  accepted,  the  company  be- 
came entitled  as  of  right  to  the  land  and  sub- 
sidy bonds  stipulated.  The  title  to  the  land  was 
perfect  on  the  issue  of  the  patents;  the  title  to 
the  bonds  vested  on  their  delivery.  Any  altera- 
tion of  the  acts  under  the  reservation  clauses, 
or  their  repeal,  could  not  revoke  the  title  to  the 
land  or  recall  the  bonds  or  change  the  right  of 
the  company  to  either.  So  far  as  these  are  con- 
cerned, the  contract  was,  long  before  the  act  of 
1878,  an  executed  and  closed  transaction,  and 
they  were  as  much  beyond  the  reach  of  the 
government  as  any  other  property  vested  in 
private  proprietorship." 

The  government,  he  adds,  "could  not  release  itself 
and  hold  the  other  party  to  the  contract.  It  could 
not  change  its  obligations  and  hold  its  rights  un- 
changed. It  cannot  bind  itself  as  a  civil  corporation, 
and  loose  itself  by  its  sovereign  legislative  power." 
(p.  759,  Italicized  by  Mr.  Justice  Field.) 

And  further,  and  finally,  of  the  government:  (p. 
760) 


94 

"If  it  had  cause  of  complaint  against  the 
company,  it  could  not  undertake  itself,  by 
legislative  decree,  to  redress  the  grievance,  but 
was  compelled  to  seek  redress  as  all  other  civil 
corporations  are  compelled,  through  the  judicial 
tribunals." 

In  Chicago  and  Burlington  Railroad  against  Chi- 
cago, 166  U.  S.,  226,  235,  the  court  said: 

"In  Davidson  v.  New  Orleans,  above  cited,  it 
was  said  that  a  statute  declaring  in  terms, 
without  more,  that  the  full  and  exclusive  title 
to  a  described  piece  of  land  belonging  to  one 
person  should  be  and  is  hereby  vested  in  an- 
other person,  would,  if  effectual,  deprive  the 
former  of  his  property  without  due  process  of 
law,  within  the  meaning  of  the  Fourteenth 
Amendment.  See  also  Missouri  Pacific  Rail- 
way v.  Nebraska,  164  U.  S.  403,  417.  Such  an 
enactment  would  not  receive  judicial  sanction 
in  any  country  having  a  written  constitution 
distributing  the  powers  of  government  among 
three  co-ordinate  departments,  and  committing 
to  the  judiciary,  expressly  or  by  implication, 
authority  to  enforce  the  provisions  of  such  con- 
stitution. It  would  be  treated  not  as  an  exer- 
tion of  legislative  power,  but  as  a  sentence — an 
act  of  spoliation." 

Authorities  might  be  multiplied  indefinitely;  it 
would  be  pedantry  to  cite  them  further.  The  reser- 
vation clause  of  the  Granting  Act  of  July  25,  1866, 
itself  recognized  the  principle,  for  it  reads  (Sec. 
12): 


95 

"And  be  it  further  enacted  that  Congress 
may  at  any  time,  having  due  regard  for  the 
rights  of  said  California  and  Oregon  Railroad 
Companies  add  to,  alter,  amend,  or  repeal  this 
act." 

The  consent  of  the  railroad  company  was  essential 
to  a  valid  resumption  or  alteration  of  its  vested 
rights;  its  consent  should  have  been  had  and  ob- 
tained, as  the  consent  of  the  Northern  Pacific  Rail- 
road Company  was  had  and  obtained,  in  the  in- 
stance of  the  Relinquishment  Act  of  July  1,  1898, 
(30  Stat.,  597,  620,  c.  546),  relating  to  the  land 
grant  to  that  company. 

"If  any  rights  had  become  vested  in  the  North- 
ern Pacific  Railroad  Company",  said  this  court, 
"which  could  not,  against  or  without  its  consent,  be 
effected  by  an  enactment  like  that  of  1898,  then  the 
objection  to  legislation,  on  the  ground  that  it  inter- 
fered with  vested  rights,  was  waived  by  the  accept- 
ance of  the  act  by  its  successor  in  interest;  for  it 
was  entirely  competent  for  the  latter  company,  if  it 
succeeded  to  all  the  rights  of  the  railroad  grantee, 
to  agree  to  such  a  settlement  as  that  devised  by  Con- 
gress". Humbird  v.  Avery,  195  U.  S.,  480,  501 ;  see 
also  United  States  v.  Inman-Paulson  Lumber  Co., 
233  Fed.,  942. 

All  this  was  in  the  mind  of  Mr.  Justice  McKenna, 
when  he  wrote  into  the  concluding  paragraph  of  his 
opinion  on  the  first  appeal,  that  any  legislation  in 


96 

the  premises  by  Congress,  should  ' 'secure  to  the  de- 
fendants all  the  value  the  granting  acts  conferred 
upon  the  railroads". 

It  was  not  in  the  mind  of  the  learned  author  of 
this  opinion,  we  submit,  with  deference,  nor  was  it 
in  the  mind  of  the  court,  that  Congress  would  or 
could  revest  itself  with  the  title  to  lands  earned  and 
held  by  the  grantee  in  complete  and  absolute  owner- 
ship, and  would  or  could,  as  it  would  now  assume  to 
do,  dispose  of  those  lands  in  its  own  way,  at  its  own 
time,  to  its  own  purchasers,  upon  its  own  terms. 
The  opinion  of  this  court  should  not  be  strained  and 
warped  to  mean  that  a  legislative  provision,  for  the 
disposition  of  these  lands  in  accordance  with  some 
fitting  policy,  was  intended  to  be  a  disposition  of 
them  by  the  grantor,  or  by  any  one  else  except  the 
owner  of  the  fee  simple  title.  We  have  already  ad- 
verted to  this  matter  of  congressional  policy  and  in- 
terposition. 

The  opinion  of  Mr.  Justice  McKenna,  fairly  read, 
makes  this  plain  enough.  He  recognizes,  as  we 
have  pointed  out,  the  relative  impracticability  of  the 
policy  expressed  by  the  covenants,  a  policy  of  settle- 
ment addressed  to  lands  that  were  largely  insuscep- 
tible of  settlement.  But  if  those  covenants  were  un- 
workable, if  that  policy  was  not  feasible,  the  remedy 
did  not  lie  in  a  disregard  of  the  contract  and  the 
law;  the  railroad  company  should  have  gone  to 
Congress  for  some  new  disposition,  where,  alone,  the 
law  and  policy  could  be  changed,  and  the  sales'  re- 


97 

quirement  made  adaptable  to  the  exigency.  There 
would  then  have  been  a  meeting  of  minds  between 
grantor  and  grantee. 

"Whatever  the  difficulties  of  performance",  says 
Mr.  Justice  McKenna,  in  language  we  have  already 
quoted,  "relief  could  have  been  applied  for  and,  it 
might  be,  have  been  secured  through  an  appeal  to 
Congress". 

And  again,  the  learned  Justice  observes,  in  lan- 
guage we  beg  to  repeat : 

"The  character  of  the  lands  furnished  no 
excuse.  It  might  have  justified  non-action,  but 
it  did  not  justify  antagonistic  action." 

And  further: 

"If  the  provisos  were  ignorantly  adopted  as 
they  are  asserted  to  have  been;  if  the  actual 
conditions  were  unknown,  as  is  asserted ;  if  but 
little  of  the  land  was  arable,  most  of  it  covered 
with  timber  and  valuable  only  for  timber  and 
not  fit  for  the  acquisition  of  homes;  if  a  great 
deal  of  it  was  nothing  but  a  wilderness  of 
mountain  and  rock  and  forest;  if  its  character 
was  given  evidence  by  the  application  of  the 
Timber  and  Stone  Act  to  the  reserved  lands ;  if 
settlers  neither  crowded  before  nor  crowded 
after  the  railroad,  nor  could  do  so;  if  the 
grants  were  not  as  valuable  for  sale  or  credit 
as  they  were  supposed  to  have  been  and  diffi- 
culties beset  both  uses, — the  remedy  ivas  ob- 
vious. Granting  the  obstacles  and  infirmities, 
they  ivere  but  promptings  and  reasons  for  an 
appeal  to  Congress  to  relax  the  law;  they  were 
neither  cause  nor  justification  for  violating  it." 


98 

But  no  relaxation  of  the  law,  no  change  in  the 
statutory  policy,  was  competent  to  Congress,  that 
went  in  impairment  of  vested  rights ;  nor  could  any 
remedy  be  administered  by  Congress  that  did  not 
"at  the  same  time  secure  to  the  defendants  all  the 
value  the  granting  acts  conferred  upon  the  rail- 
roads." But  what  was  it  that  the  granting  acts 
conferred  upon  the  railroads? — "there  was  a  com- 
plete and  absolute  grant  to  the  railroad  company  with 
power  to  sell,  limited  only  as  prescribed"  by  the 
settlers'  provisos.  And  what  of  those  provisos? — 
"their  language  is  not  directive;  it  is  restrictive  only. 
With  this  exception  the  grant  is  unqualified". 

Naked  Power  of  Sale  in  Contradistinction  from 
Estate  in  Fee. 

The  Ferris  Act,  it  would  seem,  goes  upon  the 
theory,  not  of  a  grant  to  the  railroad  company  at  all, 
but  of  a  mere  naked  trust  or  power  to  dispose  of  the 
lands  in  the  manner  specified  in  the  acts  and  to 
apply  the  proceeds  to  the  use  and  purpose  therein 
described. 

It  is  instructive  and  interesting  at  this  point  to 
contrast  the  facts,  and  the  judgments  of  this  court 
on  the  facts,  in  the  cases,  respectively,  of  Rice  v. 
Railroad  Company,  1  Black,  358,  and  Schulenberg 
v.  Harriman,  21  Wall.,  44. 

In  the  Rice  case,  Edmond  Rice,  claiming  as  an 
entryman  under  the  United  States,  brought  an  ac- 
tion of  trespass  against  the  Minnesota  and  North- 


99 

western  Railroad  Company,  for  cutting  timber  on 
the  land  in  question.  The  railroad  company  justi- 
fied the  cutting  of  the  timber  by  pleading  title  to  the 
premises  under  a  railroad  land  grant. 

This  land  grant,  of  date  June  29,  1854,  was  made 
by  Congress,  in  the  first  instance,  to  the  Territory  of 
Minnesota,  in  aid  of  railroad  construction.  The 
railroad  company  succeeded  to  the  right,  title  and 
interest  of  the  Territory,  afterwards  the  State,  such 
as  it  was,  by  grant  from  the  State,  through  the  act 
of  incorporation.  The  incorporation  act  provided, 
among  other  things,  that  "for  the  purpose  of  aiding 
the  said  company  in  the  construction  and  maintaining 
the  said  railroad,  it  is  further  enacted,  that  any  lands 
that  may  be  granted  to  the  said  Territory,  to  aid  in 
the  construction  of  the  said  railroad,  shall  be,  and  the 
same  are  hereby,  granted  in  fee  simple  absolute,  with- 
out any  further  act  or  deed ;  and  the  Governor  of  this 
Territory  or  future  State  of  Minnesota,  is  hereby  au- 
thorized and  directed,  in  the  name  and  on  behalf  of 
said  Territory  or  State,  after  the  said  grant  shall  have 
been  made  by  the  United  States  to  said  Territory,  to 
execute  and  deliver  to  said  company,  such  further 
deed  or  assurance  of  the  transfer  of  the  said  prop- 
erty, as  said  company  may  require,  to  vest  in  them 
a  perfect  title  to  the  same:  provided,  however,  that 
such  lands  shall  be  taken  upon  such  terms  and  con- 
ditions as  may  be  prescribed  by  the  act  of  Congress 
granting  the  same". 


100 

Section  1,  of  the  Act  of  Congress,  of  June  29, 
1854,  making  the  grant,  recited: 

"That  there  is  hereby  granted  to  the  Terri- 
tory of  Minnesota,  for  the  purpose  of  aiding  in 
the  construction  of  a  railroad  *  *  *  every  al- 
ternate section  of  land,  designated  by  odd  num- 
bers, for  six  sections  in  width,  on  each  side  of 
said  road  within  said  Territory." 

It  further  provided  that  the  land  "shall  be  held 
by  the  Territory  of  Minnesota,  for  the  uses  and 
purposes,  aforesaid."  This  is  made  very  explicit 
by  section  3,  which  provides  that  the  lands  granted 
to  the  Territory  "shall  be  subject  to  the  disposition 
of  any  legislature  thereof,  for  the  purpose  aforesaid 
and  no  other ;  nor  shall  it  inure  to  the  benefit  of  any 
company  heretofore  constituted  and  organized." 

It  also  provided  in  section  4 — and  the  language 
here  is  important  to  notice — "that  the  lands  hereby 
granted  to  said  territory  shall  be  disposed  of  by 
said  territory  only  in  the  manner  following,  that 
is  to  say:  no  title  shall  vest  in  said  Territory 
of  Minnesota,  nor  shall  any  patent  issue  for  any 
part  of  the  lands  hereinbefore  mentioned,  until  a 
continuous  line  of  twenty  miles  of  said  road,  shall 
be  completed  through  the  lands  hereby  granted"; 
and  further,  in  the  same  section,  "if  said  road  is 
not  completed  within  ten  years,  no  further  sales 
shall  be  made,  and  the  land  unsold  shall  revert  to 
the  United  States". 


101" 

Such  was  the  granting  act  of  Congress;  and  such 
as  it  was,  on  the  24th  day  of  August,  1854,  Con- 
gress passed  an  act,  repealing  the  act  by  which  the 
grant  had  been  made  on  the  preceding  29th  day 
of  June.  It  was  after  the  passage  of  the  repealing 
act  that  the  railroad  company  did  the  cutting  of 
the  timber,  which  the  entryman  imputed  as  a  tres- 
pass. 

The  first  question  taken  up  by  this  court,  is 
whether  the  railroad  company  acquired  any  title 
or  interest  in  the  lands  by  virtue  of  its  act  of 
incorporation. 

"If  the  defendants",  said  this  court,  "acquired 
such  a  right,  title  or  interest  in  the  lands,  under 
their  original  charter,  then  it  is  clear  that  it  be- 
came a  vested  interest  as  soon  as  the  act  of  Con- 
gress went  into  effect,  and  on  that  state  of  the 
case,  it  would  be  true,  as  contended  by  the  defend- 
ants, that  the  repealing  act  set  up  in  the  replica- 
tion of  the  plaintiff  is  void  and  of  no  effect",  citing 
Terrett  v.  Taylor,  9  Cranch,  43 ;  Pawlett  v.  Clark,  9 
Cranch,  292. 

But  even  if  the  act  of  incorporation,  for  any  rea- 
son, did  not  vest  in  the  railroad  company  an  in- 
terest in  the  lands,  the  plaintiff,  suing  as  an  entry- 
man  under  the  United  States,  would  still  be 
confronted  with  a  second  question  in  the  case, 
namely,  the  effect  of  the  act  of  Congress,  making 
the  grant  to  the  Territory  itself. 


102 

"If  the  legal  effect",  said  the  court,  "of  the  act 
of  Congress,  set  up  in  the  answer,  was  to  grant  to 
the  Territory  a  beneficial  interest  in  the  lands,  then 
it  is  equally  clear  that  it  was  not  competent  for 
Congress  to  pass  the  repealing  act  and  divest  the 
title;  and  the  defendants,  on  the  facts  exhibited  in 
the  pleadings,  although  they  did  not  acquire  any 
title  under  their  original  charter,  are,-  nevertheless, 
the  rightful  owners  of  the  land,  by  virtue  of  the 
first  amendment  to  the  same,  passed  by  the  Terri- 
torial Legislature".  It  is  not  material  to  dwell  on 
this  amendment. 

"Unless",  continues  the  court,  "both  of  the  ques- 
tions, therefore,  are  determined  in  the  negative,  the 
judgment  of  the  court  below  must  be  affirmed", 
citing  Fletcher  against  Peck,  6  Cranch,  135. 

Upon  the  first  question,  as  to  the  right  of  the 
railroad  company  to  the  land,  not  under  the  amend- 
ment to  its  charter,  but  under  the  original  charter 
itself,  it  was  the  conclusion  of  the  court,  "that 
the  defendants  acquired  no  right,  title  or  interest 
in  the  lands  in  controversy  by  virtue  of  their 
original  charter";  and  this,  upon  the  ground  that 
the  thing  granted  was  not  in  the  grantor,  that  is 
to  say,  the  Territory,  at  the  time  the  Act  of  In- 
corporation was  passed,  March  4,  1854. 

The  court  then  goes  to  the  second  question, 
whether  any  beneficial  interest  in  the  lands,  passed 
to  the  Territory  under  the  act  of  Congress  set  up 


103 

in  the  answer.  It  is  conceded  that  the  familiar 
clause  of  the  first  section  pointed  to  a  grant  in 
praesenti. 

"Standing  alone",  says  the  court,  "the  clause 
furnishes  strong  evidence  to  refute  the  proposition 
of  the  defendants,  that  a  beneficial  interest  passed 
in  praesenti  to  the  Territory;  because  it  is  dis- 
tinctly provided  that  the  lands  granted  shall  be 
held  by  the  territory  for  a  declared  use  and  pur- 
pose, evidently  referring  to  the  contemplated  rail- 
road, which,  when  constructed,  would  be  a  public 
improvement  of  general  interest". 

The  court  then  notices  the  third  section,  pro- 
viding "that  the  said  lands  hereby  granted  shall 
be  subject  to  the  disposal  of  any  Legislature  thereof 
for  the  purpose  aforesaid,  and  no  other;  nor  shall 
they  inure  to  the  benefit  of  any  company  heretofore 
constituted  or  organized". 

Much  reason  exists,  it  was  believed  by  the  court, 
to  conclude  that  the  railroad  company  fell  within 
the  prohibition  of  this  section,  as  being  a  company 
"heretofore  constituted  and  organized".  And  in 
any  event,  it  was  the  view  of  the  court  that,  under 
the  first  and  third  sections,  it  was  the  intent  of  Con- 
gress to  restrict  the  authorities  of  the  Territory, 
so  far  as  their  control  of  the  lands  was  concerned, 
to  the  strict  and  special  purpose  expressed  in  the 
act. 

"But,  restricted  as  the  authorities  of  the  Terri- 
tory  were,   by   those  limitations   and   provisions", 


104 

the  court  continues,  "their  hands  were  still  more 
closely  tied  by  the  provisions  of  the  fourth  sec- 
tion, which  remained  to  be  considered".  And  it  is 
in  the  discussion  of  the  fourth  section,  that  the 
conception  of  a  naked  power  of  sale,  in  contradis- 
tinction from  an  estate  in  fee,  emerges". 

"By  the  fourth  section,"  says  the  court,  "it  is 
provided,  'that  the  lands  hereby  granted  to  the 
said  Territory  shall  be  disposed  of  by  said  Territory 
only  in  the  manner  following — that  is  to  say,  no  title 
shall  vest  in  said  territory  of  Minnesota,  nor  shall 
any  patent  issue  for  any  part  of  the  lands  herein- 
before mentioned,  until  a  continuous  length  of 
twenty  miles  of  said  road  shall  be  completed  through 
the  lands  hereby  granted'  ". 

The  court  goes  on: 

"Certain  lands  are  granted  to  the  Territory 
by  the  first  section,  to  be  held  by  it  for  a 
specified  use  and  purpose,  for  the  construc- 
tion of  a  specific  public  improvement,  and 
to  be  exclusively  applied  to  that  purpose,  with- 
out any  other  restriction,  except  that  the  lands 
could  be  disposed  of  only  as  the  work  pro- 
gressed. To  carry  out  that  purpose,  the  lands 
were  declared  by  the  third  section,  to  be  sub- 
ject to  the  future  disposal  of  the  Territorial 
Legislature,  but  that  in  no  event  should  they 
inure  to  the  benefit  of  any  company  previously 
constituted  and  organized.  Neither  of  those 
sections  contained  any  words  which  neces- 
sarily and  absolutely  vested  in  the  territory 


105 

any  beneficial  interest  in  the  thing  granted. 
Undoubtedly,  the  words  employed  are  sufficient 
to  have  that  effect;  and  if  not  limited  or  re- 
stricted by  the  context  or  other  parts  of  the 
act,  they  would  properly  receive  that  con- 
struction ;  but  the  word,  grant,  is  not  a  techni- 
cal word  like  the  word,  enfeoff;  and  although, 
if  used  broadly,  without  limitation  or  restric- 
tion, it  would  carry  an  estate  or  interest  in  the 
thing  granted,  still  it  may  be  used  in  a  more 
restricted  sense,  and  be  so  limited  that  the 
grantee  will  take  but  a  mere  naked  trust  or 
power  to  dispose  of  the  thing  granted,  and  to 
apply  the  proceeds  arising  out  of  it  to  the  use 
and  benefit  of  the  grantor".     (1  Black,  p.  378) 

The  court  proceeds: 

"It  is  expressly  provided  by  the  fourth  sec- 
tion of  the  Act  that  no  title  shall  vest  in  the 
Territory  of  Minnesota,  nor  shall  any  patent 
issue  for  any  part  of  the  lands,  until  a  con- 
tinuous length  of  twenty  miles  of  the  road 
shall  be  completed.  Unless  that  whole  provi- 
sion, therefore,  be  rejected  as  without  mean- 
ing, or  is  repugnant  to  the  residue  of  the  act, 
it  is  not  possible,  we  think,  to  hold  that  the 
territory  acquired  a  vested  interest  in  the  lands 
at  the  date  of  the  act:  and  yet  the  fourth  sec- 
tion contains  the  same  words  of  grant  as  are 
to  be  found  in  the  first  and  third,  and  no  rea- 
son is  perceived  for  holding  they  are  not 
used  in  the  same  sense.  It  is  insisted  by  the 
defendants  that  the  provision  does  not  divest 


106 

the  grant  of  a  present  interest;  that  it  only  so 
qualifies  the  power  of  disposal  that  the  Terri- 
tory cannot  place  the  title  beyond  the  opera- 
tion of  the  condition  specified  in  the  grant. 
But  they  do  not  attempt  to  meet  the  difficulty 
that,  by  the  express  words  of  the  act,  the 
absolute  title  remained  in  the  grantor,  at  least 
until  twenty  miles  of  the  road  were  completed : 
nor  do  they  even  suggest  by  what  process  of 
reasoning  the  four  words,  'no  title  shall  vest', 
can  be  shorn  of  their  usual  and  ordinary  sig- 
nification, except  to  say  that  it  would  be  doing 
great  injustice  to  Congress  to  hold,  notwith- 
standing the  words  of  the  first  section,  that  no 
title  passed  to  the  grantee.  Whether  the  pro- 
vision be  just  or  unjust,  the  words  mentioned 
are  a  part  of  the  act,  and  it  is  not  competent 
for  this  court  to  reject  or  disregard  a  material 
part  of  an  act  of  Congress,  unless  it  be  so 
clearly  repugnant  to  the  residue  of  the  act 
that  the  whole  cannot  stand  together.  On  the 
other  hand,  if  it  be  assumed  that  the  Terri- 
tory acquired  but  a  mere  naked  trust  or  power 
to  dispose  of  the  lands,  and  carry  out  the 
contemplated  public  improvements  therein  de- 
scribed, then  the  whole  act  is  consistent  and 
harmonious",     (p.  379) 

In  fine,  as  the  court  sums  it  up,  "it  is  clear  that 
the  Territory  acquired  nothing  under  the  act  of 
Congress  set  up  in  the  answer,  but  a  mere  naked 
trust  or  power  to  dispose  of  the  lands  in  the  manner 
therein  specified,  and  to  apply  the  same  to  the  use 
and  purpose  therein  described",     (p.  381) 


107 

In  such  event,  the  court  holds  " Congress  could 
at  any  time  repeal  the  act,  creating  the  trust,  if 
not  executed,  and  withdraw  the  power",  (p.  381) 

It  was  suggested  to  the  court  that  this  doctrine  of 
a  mere  naked  trust  or  power  to  dispose  of  the  lands 
and  to  apply  the  proceeds,  would  be  applicable  to 
all  the  railroad  grants  made  by  Congress  to  the 
states  and  territories.    And  the  court  answered: 

"Of  course,  the  suggestion  is  correct,  if  such 
other  grants  are  made  in  the  same  terms,  and 
are  subject  to  the  same  limitations,  restric- 
tions and  prohibitions;  but  we  have  looked  into 
that  subject,  and  think  it  proper  to  say,  that 
we  see  no  foundation  whatever  for  the  sugges- 
tion. One  of  these  grants  came  under  the  re- 
vision of  the  court,  in  the  case  of  Lessieur 
against  Price,  (12  How.,  76)  and  this  court 
held,  and  we  have  no  doubt,  correctly,  that 
there  was  a  present  grant,  and  that  the  legis- 
lature was  vested  with  full  power  to  select  and 
locate  the  land,  but  the  case  is  so  unlike  the 
present,  that  we  do  not  think  it  necessary  to 
waste  words  in  pointing  out  the  distinction", 
(p.  381-2) 

The  Rice  case  was  decided  by  this  court  at  the 
December  term,  1861.  Schulenberg  against  Harri- 
man,  21  Wall,  44,  was  decided  at  the  October  term, 
1874.  The  Schulenberg  case,  like  the  Rice  case, 
turned  on  the  right  to  severed  timber ;  to  some  sixteen 
hundred  thousand  feet  of  pine  saw-logs,  which  had 
been  cut  on  the  land  in  question — land  which  had  been 


108 

granted  by  Congress  to  the  State  of  Wisconsin,  in  aid 
of  railroad  construction.  We  have  been  over  this  case. 
The  defendant,  Harriman,  who  had  seized  the  logs, 
stood  upon  the  title  of  the  State  of  Wisconsin,  as  the 
congressional  grantee  of  the  land,  but  the  railroad 
had  never  been  constructed;  the  time  for  the  con- 
struction had  long  since  passed;  and  the  construc- 
tion of  the  road  within  a  specified  time  was  a  condi- 
tion subsequent.  No  forfeiture,  however,  had  been 
declared  by  Congress,  and  this  court  held  that  until 
Congress  should  resume  the  title  by  declaration  of 
forfeiture,  as  for  breach  of  the  condition  subse- 
quent, the  title  to  the  land  was  still  in  the  grantee 
and  Harriman,  as  agent  of  the  grantee,  was  en- 
titled to  the  cut  timber.  Counsel  for  Schulenberg 
put  the  strain  of  his  case  on  the  decision  in  Rice 
against  Railroad  Company,  supra.  He  argued  that 
the  interest  of  the  grantee,  the  State  of  Wisconsin, 
was  "a  mere  naked  trust  or  power".  (21  Wall, 
p.  53) 

This  court  declined  to  yield  to  the  argument,  dis- 
tinguished the  Rice  case,  and  held  the  act  of  Con- 
gress to  be  a  present  grant  to  the  State  of  Wisconsin. 

"That  the  Act  of  Congress  of  June  3,  1856",  said 
Mr.  Justice  Field,  "passed  a  present  interest  in  the 
lands  designated,  there  can  be  no  doubt.  The  lan- 
guage used  imports  a  present  grant  and  admits  of 
no  other  meaning.  The  language  of  the  first  section 
is,  ''that  there  be,  and  is  hereby,  granted  to  the  State 
of  Wisconsin'  the  lands  specified.    The  third  section 


109 

declares  'that  the  lands  hereby  granted  to  said 
state  shall  be  subject  to  the  disposal  of  the  legis- 
lature thereof;  and  the  fourth  section  provides 
in  what  manner  sales  shall  be  made,  and  enacts 
that  if  the  road  be  not  completed  within  ten  years, 
'no  further  sale  shall  be  made,  and  the  lands  unsold 
shall  revert  to  the  United  States'.  The  power  of 
disposal  and  the  provision  for  the  lands  reverting 
both  imply,  what  the  first  section  in  terms  declares, 
that  a  grant  is  made,  that  is,  that  the  title  is  trans- 
ferred to  the  State",    (p.  60) 

"The  case  of  Rice  against  Railroad  Company,  re- 
ported in  the  first  of  Black",  Mr.  Justice  Field 
continues,  "does  not  conflict  with  these  views.  The 
words  of  present  grant  in  the  first  section  of  the 
act,  there  under  consideration,  were  restrained  by 
a  provision  in  a  subsequent  section  declaring  that 
the  title  should  not  vest  in  the  Territory  of  Minne- 
sota until  the  road  or  portions  of  it  were  built", 
(p.  62) 

Indeed,  if  it  be  necessary,  we  can  vouch  the 
Government  into  court,  as  a  warrantor  of  the  grants 
in  question  here,  as  falling  under  the  rule  and  dis- 
tinction of  the  Schulenberg  case. 

In  the  report  of  the  Commissioner  of  the  General 
Land  Office  for  1906,  at  pages  21  and  22,  the  Ore- 
gon and  California  Land  Grant  is  dealt  with. 

"The  grant  of  the  Oregon  and  California  Railroad 
Company",  says  the  Commissioner,  "under  the  Act  of 
July  25,  1866,  embraced  3,821,901.80  acres.     The 


110 

prescribed  conditions  of  the  grant  not  having  been 
met  by  the  company,  the  time  for  performance  was 
extended  by  the  Act  of  April  10,  1869.  Although 
the  company  failed  to  comply  with  the  terms  within 
the  time  specified,  it  complied  with  them  substan- 
tially before  a  forfeiture,  and  title  to  all  the  lands 
consequently  vested  in  the  company  (see  Schulen- 
berg  against  Harriman,  21  Wall.,  44),  subject  only 
to  the  covenant  expressed  in  the  proviso  of  the  Act 
of  1869,  which  declares  that  the  lands  granted  by 
the  act  aforesaid  shall  be  sold  to  actual  settlers 
only,  in  quantities  not  greater  than  one-quarter  sec- 
tion to  one  purchaser,  and  for  a  price  not  exceeding 
$2.50  per  acre". 

And  on  March  19,  1907,  the  Commissioner  of 
the  General  Land  Office,  soon  to  become  Secretary  of 
the  Interior,  wrote  to  Hon.  W.  C.  Hawley,  repre- 
sentative in  Congress,  from  Oregon,  the  following 
letter : 

"Department  of  the  Interior. 
"General  Land  Office,  Washington,  D.  C. 

"March  19,  1907. 
"Honorable  W.  C.   Hawley,  House  of  Rep- 
resentatives— 
"Sir:  In  reply  to  your  letter  of  the  7th  inst. 
addressed  to  the  Secretary  of  the  Interior,  and 
handed  to  me  for  attention,  you  are  advised 
that  the  Act  of  1866  made  a  grant  of  lands 
to  the  California  and  Oregon  Railroad  Com- 
panies conditioned  upon   the  performance  of 
certain  acts  by  the  company  within  a  specified 


Ill 

time.  The  prescribed  conditions  not  having 
been  met  by  the  company,  the  time  of  perfor- 
mance was  extended  by  the  Act  of  1869  and, 
although  the  company  failed  to  comply  with 
the  terms  of  the  grant  before  the  time  specified 
they  were  subsequently  complied  with  before 
a  forfeiture,  and  title  to  all  the  land  within 
the  grant  consequently  vested  in  the  company 
(See  Schulenberg  v.  Harriman,  21  Wall.,  44), 
subject  only  to  the  covenant  expressed  in  the 
proviso  contained  in  the  Act  of  1869,  which 
declares  that  the  lands  granted  by  the  Act 
aforesaid  shall  be  sold  to  actual  settlers  only, 
in  quantities  not  greater  than  one-quarter- 
section  to  one  purchaser,  and  for  a  price  not 
exceeding  $2.50  per  acre.  As  soon  as  the  title 
vested  in  the  company,  the  jurisdiction  over 
the  lands  passed  from  the  executive  branch  of 
the  Government,  and  the  enforcement  of  the 
provision  rests  with  the  courts,  through  appro- 
priate action  by  either  the  settlers  entitled  to 
purchase  or  by  the  government  acting  through 
the  Department  of  Justice." 

The  Commissioner  goes  on  to  say  that  in  his 
judgment  the  power  of  Congress  to  prescribe  the 
proviso  cannot  be  questioned,  and  he  puts  it  on  the 
ground  that  the  proviso  "was  made  in  considera- 
tion of  the  extension  of  time  granted  to  the  com- 
pany." 

"The  company,"  he  adds,  "is  therefore  without 
authority  to  sell  the  lands  to  any  other  person,  in 


112 

any  other  amount,  or  for  a  greater  price  than  pre- 
scribed in  the  proviso;  and  any  conveyance  which 
the  company  has  attempted  to  make  on  a  sale  made 
in  violation  of  the  statute  would  not  be  sustained 
by  the  courts.  Since  title  passed  from  the  Govern- 
ment, subject  only  to  the  covenants  created  by  the 
proviso,  it  is  doubtful  if  Congress  has  power  to 
enact  any  law  to  compel  a  compliance  with  the 
terms  of  the  provision,  and  the  covenant  can  only 
be  enforced  in  the  courts". 

The  joint  resolution,  authorizing  the  Attorney 
General  to  bring  the  pending  suit,  was  approved 
April  30,  1908,  (35  Stat,  571).  The  bill  of  com- 
plaint in  the  pending  suit  was  filed  September  4, 
1908.  This  makes  the  report  of  the  Commissioner 
of  the  General  Land  Office  for  1906,  and  the  Com- 
missioner's letter  of  March  19,  1907,  of  special 
interest.  They  were  not  declarations  post  litem 
motam. 

Reservation  Clause  in  the  Act  of  July  25,  1866. 

The  Act  of  May  4,  1870,  making  the  west  side 
grant,  has  no  reservation  clause.  Section  12  of 
the  Act  of  July  25,  1866 — the  Act  making  the  east 
side  grant — is  as  follows: 

"And  it  be  further  enacted,  that  Congress 
may,  at  any  time,  having  due  regard  for  the 
rights  of  said  California  and  Oregon  Railroad 
Companies  add  to,  alter,  amend,  or  repeal  this 
Act". 


113 

These  reservation  clauses  are  familiar;  they  have 
often  been  before  the  courts — many  times  before 
this  court.  Nothing  is  better  settled,  than  that  the 
power  of  the  Legislature,  under  such  a  clause,  is 
not  unlimited ;  vested  rights,  already  acquired  under 
the  operation  of  the  unaltered  or  unrepealed  statute, 
are  beyond  the  power  of  the  Legislature,  are  pro- 
tected by  the  constitutional  guaranty  of  due  process 
of  law.  Chief  Justice  Shaw  blazed  the  way  in 
Commonwealth  against  Essex  Company,  13  Gray, 
239,  253: 

"It  seems  to  us",  he  says,  "that  this  power  must 
have  some  limit,  though  it  is  difficult  to  define  it. 
Suppose  an  authority  has  been  given  by  law  to  a 
railroad  corporation  to  purchase  a  lot  of  land,  for 
purposes  connected  with  its  business;  and  they  pur- 
chased such  lot  from  a  third  party;  could  the 
Legislature  prohibit  the  company  from  holding  it? 
If  so,  in  whom  should  it  vest;  or  could  the  Legisla- 
ture direct  it  to  revest  in  the  grantor  or  escheat  to 
the  public;  or  how  otherwise?  *  *  *  Perhaps  from 
these  extreme  cases — for  extreme  cases  are  allow- 
able to  test  a  legal  principle — the  rule  to  be  ex- 
tracted is  this:  that  where,  under  power  in  a 
charter,  rights  have  been  acquired  and  become 
vested,  no  amendment  or  alteration  of  the  charter 
can  take  away  the  property  or  rights,  which  become 
vested  under  a  legitimate  exercise  of  the  powers 
granted." 


114 

This  was  taken  as  a  postulate  in  the  Sinking- 
Fund  cases,  as  well  in  the  prevailing,  as  in  the  dis- 
senting opinions. 

"That  this  power",  said  Mr.  Chief  Justice  Waite, 
"has  a  limit,  no  one  can  doubt.  All  agree  that  it  can- 
not be  used  to  take  property  already  acquired,  under 
the  operation  of  the  charter,  or  to  deprive  the  cor- 
poration of  the  fruits  actually  reduced  to  possession 
of  contracts  lawfully  made". 

The  legislature  exercising  this  reserved  power,  the 
Chief  Justice  went  on  to  say,  "cannot  undo  what 
has  already  been  done,  and  it  cannot  unmake  con- 
tracts that  have  already  been  made".  (99  U.  S. 
pp.  720-721). 

Mr.  Justice  Strong,  in  dissenting,  said:  "All  the 
cases  agree  that  such  a  reserved  power  is  not  with- 
out limits.  I  think  its  limits  may  be  stated  gene- 
rally thus: 

"It  must  be  exercised  when  exerted  at  all, 
so  as  to  do  no  injustice  to  those  to  whom  the 
franchise  has  been  granted.  Certainly  the 
reservation  cannot  mean  a  right  to  take  away 
the  franchise,  in  whole  or  in  part,  and  yet 
hold  the  grantee  to  the  performance  of  the 
duties  assumed — the  consideration,  given  for 
the  grant",     (p.  741) 

He  quotes  the  language  of  Mr.  Chief  Justice 
Shaw,  excerpted  above,  and  turns  to  the  opinion  of 
this  court,  in  Miller  against  the  State,  15  Wall.  478, 
where  it  was  said  by  Mr.  Justice  Clifford: 


115 

"Power  to  legislate,  founded  upon  such  a 
reservation  in  a  charter  of  a  private  corpora- 
tion, is  certainly  not  without  limitations,  and 
it  may  well  be  admitted  that  it  cannot  be  exer- 
cised to  take  away  or  destroy  rights  acquired  by 
such  a  charter,  and  which,  by  a  legitimate  use 
of  the  powers  granted,  have  become  vested  in 
the  corporation",     (p.  742) 

Mr.  Justice  Bradley,  also  dissenting,  speaks  of 
the  reservation  clause:  (p.  749) 

"It  certainly  cannot  be  interpreted  as  reserv- 
ing a  right  to  violate  a  contract  at  will.  No 
Legislature  ever  reserved  such  a  right  in  any 
contract.  Legislatures  often  reserve  the  right 
to  terminate  a  continuous  contract  at  will; 
but  never  to  violate  a  contract,  or  to  change 
its  terms  without  the  consent  of  the  other 
party." 

"The  reserved  power  in  question,"  he  continues,  "is 
simply  that  of  legislation — to  alter,  amend,  or  repeal 
a  charter.  This  is  very  different  from  the  power  to 
violate  or  to  alter  the  terms  of  a  contract  at  will.  A 
reservation  of  power  to  violate  a  contract,  or  alter  it, 
or  impair  its  obligation,  would  be  repugnant  to  the 
contract  itself  and  void.  A  proviso  repugnant  to 
the  granting  part  of  a  deed,  or  to  the  enacting  part 
of  a  statute  is  void.  Interpreted  as  a  reservation 
of  the  right  to  legislate,  the  reserved  power  is  sus- 
tainable on  sound  principles;  but  interpreted  as  the 
reservation  of  a  right  to  violate  an  executed  con- 
tract, it  is  not  sustainable". 


116 

And  by  Mr.  Justice  Field,  in  the  same  case,  it  was 
said  of  the  reserved  power: 

"It  cannot  be  exerted  to  effect  the  contract 
so  far  as  it  has  been  executed,  or  the  rights 
vested  under  it.  When  the  road  was  completed 
in  the  manner  prescribed  and  accepted,  the 
company  became  entitled  as  of  right  to  the 
land  and  subsidy  bonds  stipulated.  The  title 
to  the  land  was  perfect  on  the  issue  of  the 
patents;  the  title  to  the  bonds  vested  on  their 
delivery.  Any  alteration  of  the  acts,  under 
the  reservation  clauses  or  their  repeal  could 
not  revoke  the  title  to  the  land  or  recall  the 
bonds,  or  change  the  right  of  the  company  to 
either,     (p.  757)" 

In  Stearns  against  Minnesota,  179  U.  S.  223,  259, 
it  was  held  that  the  reserved  right  to  amend  a  cor- 
poration charter  "does  not  confer  mere  arbitrary 
power,  and  cannot  be  so  exercised  as  to  violate  fun- 
damental principles  of  justice,  by  taking  of  prop- 
erty without  due  process  of  law".  And  it  was  said 
of  the  guaranty  of  "due  process",  in  Ochoa  against 
Hernandez,  230  U.  S.  140,  161: 

"Without  the  guaranty  of  'due  process*,  the 
right  of  private  property  cannot  be  said  to 
exist,  in  the  sense  in  which  it  is  known  to  our 
laws.  The  principle,  known  to  the  common 
law  before  the  Magna  Charta,  was  embodied 
in  that  charter  (Coke.  2.  Inst.,  45,  50) ;  and 
has  been  recognized  since  the  Revolution  as 
among  the  safest  foundations  of  our  institutions. 


117 

Whatever  else  may  be  uncertain  about  the  defini- 
tion of  the  term  'due  process  of  law',  all  authori- 
ties agree  that  it  inhibits  the  taking  of  one  man's 
property  and  giving  it  to  another,  contrary  to 
settled  usages  and  modes  of  procedure,  and  with- 
out notice  or  an  opportunity  for  a  hearing". 

"The  courts  have  often  held",  it  was  said  in  Bien- 
ville Water  Supply  Company  against  Mobile,  186 
U.  S.,  212,  222,  "that  it  was  not  within  the  power 
of  the  Legislature,  under  the  guise  of  an  act  amend- 
ing or  repealing  a  charter,  to  take  away  the 
property  of  the  corporation".  (See  also  Chicago, 
M.  &  St.  P.  RR.  v.  Wisconsin,  238  U.  S.,  491,  501-2)  ; 
Houston  and  Texas  Central  Railway  v.  Texas,  170 
U.  S.,  243,  254-5;  United  States  v.  U.  P.  Ry.,  160 
U.  S.  1,  32-3;  Detroit  v.  Detroit  P.  R.  Co.,  43  Mich., 
140,  146-148,  opinion  by  Cooley,  J. 

It  is  to  be  said,  with  propriety,  of  the  effect  of 
the  Ferris  Act,  as  Judge  Cooley  said  of  a  Michi- 
gan Statute,  in  the  case  last  cited: 

"A  statute  which  could  have  this  effect, 
would  not  be  a  statute  to  amend  franchises, 
but  a  statute  to  confiscate  property;  it  would 
not  be  a  statute  of  regulation  but  of  spolia- 
tion", 

In  the  very  recent  case  in  this  court  of  Long 
Sault  Development  Company  v.  Call,  opinion  by 
Mr.  Justice  Clarke,  decided  December  11,  1916,  it 
was  said: 


118 

"The  grants  of  the  Acts  of  1907  are  such 
that,  if  it  was  a  valid  law,  upon  their  being 
accepted,  they  constituted  property  or  contract 
rights,  of  which  the  plaintiff  could  not  be 
deprived,  and  which  could  not  be  impaired,  by 
subsequent  legislation;  and,  therefore,  the 
denial  by  the  defendant  in  error  of  the  juris- 
diction of  this  court  renders  it  necessary  for  us 
to  determine  whether  the  Court  of  Appeals  in 
its  decision,  gave  any  effect  to  the  repealing 
act." 

On  looking  into  the  opinion  of  the  Court  of 
Appeals,  for  its  consideration  of  the  repealing  act 
in  question, — an  Act  of  the  Legislature  of  New 
York  of  1913 — Mr.  Justice  Clarke  finds,  "not  only 
did  it  not  give  to  it  an  effect  which  would  impair 
any  contract  relation  springing  from  the  Act  of 
1907,  but  *  *  on  the  contrary,  it  concluded  that  the 
repeal  'could  not  operate  to  confiscate  any  valid 
franchise  or  property  right,  which  the  Long  Sault 
Development  Company  had  previously  acquired 
under  the  act  repealed'". 

The   Question   of   Condemnation. 

We  can  scarcely  believe  that  the  Ferris  Act  will 
be  defended,  as  a  taking  of  property  for  public  use 
with  just  compensation.  It  was  a  taking  of  prop- 
erty— this  is  clear  enough — a  down-right  forfeiture, 
but  it  was  not  a  taking  for  a  public  use.  It  was 
a  resumption  by  the  grantor  of  property  that  had 
been  contracted  for,  earned  and  conveyed;  and  the 


119 

grantee,  to  whom  the  grant  has  been,  as  we  have 
shown,  a  source  of  expense  and  loss,  is  relegated  to 
a  dwindling  and  vanishing  expectancy,  contingent 
on  the  grantor's  administration  of  the  forfeited 
grant  for  a  period  of  ten  years.  Such  is  this  ex- 
traordinary statute.  But  we  need  not  labor  the  point. 
As  this  Court  said,  in  Monongahela  Navigation  Co.  v. 
United  States,  148  U.  S.,  312,  327: 

"By  this  legislation,  Congress  seems  to  have 
assumed  the  right  to  determine  what  shall  be 
the  measure  of  compensation.  But  this  is  a 
judicial  and  not  a  legislative  question.  The 
Legislature  may  determine  what  private  prop- 
erty is  needed  for  public  purposes — that  is  a 
question  of  a  political  and  legislative  character ; 
but  when  the  taking  has  been  ordered,  then  the 
question  of  compensation  is  judicial.  It  does 
not  rest  with  the  public,  taking  the  property, 
through  Congress  or  the  Legislature,  its  repre- 
sentative, to  say  what  compensation  shall  be 
paid,  or  even  what  shall  be  the  rule  of  compen- 
sation. The  constitution  has  declared  that  a 
just  compensation  shall  be  paid,  and  the  ascer- 
tainment of  that  is  a  judicial  inquiry". 

III. 

COSTS   WERE   IMPROPERLY   TAXED   AGAINST 
THESE   APPELLANTS. 

The  great  question  in  the  case,  upon  which  the 
decision  of  the  District  Court  in  the  first  instance, 
and  afterwards  of  the  Supreme  Court,  turned, 
was  the  question  of  forfeiture — whether  the  settlers' 


120 

clause  was  a  condition  subsequent  or  a  covenant. 
Upon  that  question  these  appellants  prevailed.  It 
may  be  suggested  that  we  put  testimony  into  the 
record,  going  to  the  questions  of  estoppel,  assent  and 
waiver,  as  against  the  right  of  the  government  to  urge 
a  violation  on  our  part  of  the  covenants,  and  it  is  true 
that  the  case  did  not  go  off  upon  the  question  of 
waiver  or  estoppel.  But  this  same  testimony,  so  put 
by  us  into  the  record,  had  its  bearing  upon  the  point 
on  which  the  case  was  made  to  turn — that  is  to  say, 
the  question  whether  the  settlers'  clause  was  a  con- 
dition subsequent,  for  it  went  to  the  question  of 
practical  and  contemporaneous  exposition  of  the 
statute — and  more  particularly  of  its  exposition  at 
the  hands  of  the  executive  Department,  charged 
with  the  administration  of  the  law.  It  went  to  show 
by  such  exposition  that  the  settlers'  clause  had  been 
expounded  and  construed,  in  practice,  as  a  covenant. 
This  was  recognized  in  the  opinion  of  the  Supreme 
Court,  238  U.  S.,  at  pages  424-5,  where  it  is  said: 

"It  is  contended  that  if  sales  were  made  un- 
der the  limitations  of  the  provisos  the  breaches 
were  acquiesced  in,  and  for  this  the  action  and 
knowledge  of  the  officers  of  the  government  are 
adduced — indeed  the  knowledge  of  Congress  it- 
self; and  reciting  what  was  done  under  the 
grants,  counsel  say:  'It  is  a  story  of  mortgages 
and  sales,  executory  contracts  and  conveyances, 
and  a  stream  of  government  patents  flowing  in 
between.  These  things  were  known  of  all ;  they 
were  matters  of  common  knowledge,  notoriety, 


121 

of  public  record;  the  railroad  knew  them;  the 
people  knew  them,  the  government  knew  them.' 
And  cases  are  cited  which,  it  is  contended,  es- 
tablish that  such  circumstances  might  work  an 
estoppel  even  against  the  government,  which, 
when  it  appears  in  court,  it  is  contended,  is 
bound  like  other  suitors,  and  certainly  establish 
that  for  more  than  forty  years  in  the  view  of 
the  executive  officers  the  provisos  were  not  con- 
ditions  subsequent.  Granting  their  strength 
in  that  regard,  granting  they  have  some 
strength  in  every  regard,  they  have  not  con- 
trolling force,  considering  the  provisos  as 
simple  covenants.  And  they  cannot  be  asserted 
as  an  estoppel." 

And  if  it  be  suggested,  as  it  was  suggested  by  the 
District  Judge,  that  the  United  States  "was  re- 
quired to  bring  this  suit  in  order  to  determine  as  to 
the  violations  of  this  proviso,  and  the  government 
has  prevailed  in  the  end  and  the  court  has  declared 
that  the  railroad  company  has  violated  the  provisos 
— I  think  for  that  reason  the  government  should  re- 
cover costs,"  the  answer  is  not  difficult.  The  gov- 
ernment, in  the  first  place  never  brought  suit  to  de- 
termine as  to  the  violations  of  the  proviso  on  its  own 
initiative.  It  was  memorialized  to  do  so,  as  we 
pointed  out,  by  the  Legislature  of  Oregon :  and  that 
memorial  did  not  come  into  being  until  the  year 
1908,  some  forty  years  after  the  passage  of  the 
granting  act,  and  more  than  thirty  years  after  the 
administration  of  this  grant,  as  it  was  administered 
by  the  railroad  company  had  become  a  "matter  of 
common  knowledge,  of  notoriety,  of  public  record." 


122 

The  transactions  of  the  railroad  company  in  respect 
to  the  sales  of  these  lands,  as  we  have  already 
noticed,  were  communicated  in  a  detailed  and  item- 
ized way  to  the  bureau  of  the  Interior  Department, 
specially  constituted  to  have  such  matters  in  charge, 
the  transactions  were  communicated  by  the  bureau 
to  the  Secretary  of  the  Interior,  by  him  to  the  Presi- 
dent and  by  the  President  to  Congress.  It  is,  we 
submit  with  deference,  not  equitable  upon  the 
grounds  suggested  and  in  view  of  the  long  and 
known  history  of  the  transactions,  to  tax  costs 
against  the  railroad  company,  after  it  has  pre- 
vailed in  the  substantive  contention,  upon  a  sugges- 
tion that  the  government  was  required,  by  the  fault 
of  the  railroad  company,  to  bring  this  suit  "to  de- 
termine as  to  the  violations  of  this  proviso".  The 
temporary  injunction,  which  the  government  now 
seeks  to  import  by  this  decree  into  the  general 
injunction  against  future  violations  of  the  coven- 
ants, itself  rested  upon  the  very  testimony  which  we 
put  into  this  record  as  to  the  non-settlement  charac- 
ter of  the  lands.  The  Supreme  Court  in  its  opinion, 
as  we  have  quoted  it,  sums  up  that  testimony  and 
makes  it  the  basis  and  explanation  of  the  reference  of 
the  subject  matter  to  Congress.  It  is,  we  think,  a  most 
unusual  assessment  of  costs,  under  the  circum- 
stances of  this  case,  to  penalize  these  appellants,  as 
this  decree  does,  with  costs  taxed  at  $6,249.02. 

In  the  case  of  Northern  Trust  Company  vs.  Sny- 
der, 77  Fed.  818,  the  court  said: 


123 


" Without  undertaking  to  go  further  than  the 
case  before  us  requires,  we  are  of  the  opinion 
that  the  appellant  is  entitled  to  the  costs  of  this 
appeal.  The  appellant  has  succeeded  in  re- 
versing the  decre  in  the  most  important  part, 
so  far  as  the  amount  of  money  is  concerned. 
It  is  true  the  appeal  was  from  the  entire  de- 
cree, and  that  the  appellant  contested  the  right 
of  the  appellee  to  the  recovery  of  any  amount. 
We  think,  however,  it  would  be  a  harsh  rule 
that  would  deprive  an  appellant  of  the  statu- 
tory costs  of  appeal  unless  success  attended  the 
whole  contention.  Where  the  appeal  has  sub- 
stantially prevailed  we  perceive  no  reason  to 
deny  to  appellant  the  statutory  costs  which 
have  been  incurred  in  the  successful  attempt 
to  assert  a  right." 

While  this  language  was  used  of  costs  on  an  ap- 
peal, it  expresses  the  spirit  and  principle  by  which  a 
court  should  be  moved,  a  court  of  equity  especially, 
in  determining  the  assessment  of  costs. 

In  Street  on  Federal  Equity  Practice  (Section 
2022)  it  is  said: 

"Situations  frequently  arise  where  it  is 
deemed  inequitable  for  all  the  costs  to  be  im- 
posed on  either  party  exclusively,  and  where 
this  appears  to  be  the  case,  the  case  may  be 
disposed  of  without  adjudging  costs  in  favor  of 
either,  but  leaving  each  to  bear  the  costs  of 
his  own  side  of  the  litigation". 

Of  course,  we  are  not  authorized  to  ask  for  costs 
against  the  United  States;  but  it  must  excite  some 


124 

special  wonder  that  an  application  should  have 
been  made  here  by  the  government  for  costs,  in  view 
of  the  principal  question  at  issue,  on  which  the  gov- 
ernment argued  and  staked  its  case,  and  of  the  final 
adjudication  of  that  question  in  the  Supreme  Court 
of  the  United  States.  It  will  excite  some  surprise 
that  the  government,  defeated  in  its  contention, 
should  come  to  the  court  of  first  instance,  and  ask 
that  these  appellants  be  penalized  in  costs  because 
they  prevailed  on  the  turning  point  of  the  case. 

It  is  now  respectfully  submitted  that  the  decree 
of  the  District  Court,  herein  appealed  from,  is  not 
in  accordance  with  the  opinion  of  the  Supreme 
Court,  and  that  it  should  be  reversed,  with  direc- 
tions to  enter  a  decree,  pursuant  to  the  mandate  of 
the  Supreme  Court  of  the  United  States,  and  with- 
out costs  on  the  appellants;  and  such  a  decree,  it  is 
respectfully  submitted,  is  the  decree  which  the  ap- 
pellants proposed  to  the  District  Court  and  which  is 
set  forth  in  the  transcript  of  this  record. 

It  is  further  respectfully  submitted  that  the  in- 
validity of  the  Ferris  Act  should  be  pronounced. 

Wm.  F.  Herrin, 
P.  F.  Dunne, 
Wm.  D.  Fenton, 
Solicitors  for  Defendants  and  Appellants, 
Oregon  and  California  Railroad  Com- 
pany, Southern  Pacific  Company,  and 
Stephen  T.  Gage,  Individually  and  as 
Trustee. 

Frank  C.  Cleary, 

Of  Counsel. 


125 

APPENDIX  A. 

Decree  on  Mandate  of  United  States 
Supreme  Court. 

In  the  District  Court  of  the  United  States  for  the 
District  of  Oregon. 

No.  3340. 
DECREE. 

The  United  States  of  America, 

Complainant, 
vs. 
Oregon  &  California  Railroad  Company, 
et  al, 

Defendants, 
John  L.  Snyder,  et  al, 

Defendants  and  Cross-Complainants, 
William  F.  Slaughter,  et  al, 

Interveners. 
In  pursuance  of  the  mandate  of  the  Supreme 
Court  of  the  United  States  filed  in  this  court  on  the 
8th  day  of  December,  1915,  in  the  above  entitled 
cause,  counsel  for  the  respective  parties  being  pres- 
ent, it  is  by  the  Court  ordered,  adjudged  and  de- 
creed as  follows : 

1.  That  the  decree  heretofore  entered  in  said 
cause  so  far  as  it  affects  the  defendants,  Oregon  & 
California  Railroad  Company,  Southern  Pacific 
Company,  Stephen  T.  Gage,  individually  and  as 
trustee,  Union  Trust  Company,  individually  and  as 
trustee,  hereinafter  called  "the  defendants,"  be,  and 
the  same  is  hereby  set  aside  and  held  for  naught, 
but  is  adhered  to  in  all  respects  as  to  the  defendants 
and  cross-complainants,  hereinafter  called  the 
"cross-complainants,"  and  the  interveners. 


126 

2.  That  the  defendants  and  their  respective  offi- 
cers and  agents  be,  and  each  is  hereby,  enjoined 
from  selling  the  lands  or  any  part  thereof  granted 
either  by  the  Act  of  Congress  approved  July  25, 
1866,  as  amended  by  the  Act  of  Congress  of  April 
10,  1869,  or  by  the  Act  of  Congress  approved  May 
4,  1870,  whether  the  said  lands  be  situated  within 
the  place  or  indemnity  limits  of  the  grants  thereby 
made,  to  any  person  not  an  actual  settler  on  the 
land  sold  to  him,  or  in  quantities  greater  than  one- 
quarter  section  to  one  purchaser,  or  for  a  price  ex- 
ceeding $2.50  per  acre ;  and  from  selling  any  of  the 
timber  on  said  lands,  or  any  mineral  or  other  de- 
posits therein,  except  as  a  part  of  and  in  conjunc- 
tion with  the  land  on  which  the  timber  stands  or  in 
which  the  mineral  or  other  deposits  are  found;  and 
from  cutting  or  removing  or  authorizing  the  cutting 
or  removal  of  any  of  the  timber  thereon;  or  from 
removing  or  authorizing  the  removal  of  mineral  or 
other  deposits  therein,  except  in  connection  with  the 
sale  of  the  land  bearing  the  timber  or  containing  the 
mineral  or  other  deposits. 

3.  That  the  defendants  and  their  respective  offi- 
cers and  agents  be,  and  each  is  hereby,  enjoined 
from  making  or  agreeing  to  make,  either  directly  or 
indirectly,  any  disposition  whatsoever  of  said  lands 
or  of  any  part  thereof,  or  of  the  timber  thereon  or 
any  part  thereof,  or  of  any  mineral  or  other  deposits 
therein ;  from  cutting,  removing,  or  authorizing  the 
cutting  or  removal  of  the  timber  thereon  or  any  part 
thereof;  from  removing  or  authorizing  the  removal 
of  mineral  or  other  deposits  therein;  and  from  dis- 
posing of,  receiving  or  exerting  any  control  over  any 
money  which  arose,  or  may  hereafter  arise,  from 


127 

said  lands,  either  through  sales  thereof  or  of  timber 
thereon,  or  through  condemnation  proceedings  or 
otherwise,  and  now  on  deposit,  or  which  may  here- 
after be  placed  on  deposit,  with  any  bank,  clerk  of 
court,  or  other  institution  or  person,  to  await  the 
final  decision  of  the  Supreme  Court  of  the  United 
States  in  this  case,  until  Congress  shall  have  a 
reasonable  opportunity  to  make  provision  by  legis- 
lation for  the  disposition  of  said  lands,  timber, 
money,  mineral,  or  other  deposits,  in  accordance 
with  such  policy  as  Congress  may  deem  fitting,  un- 
der the  circumstances,  and  at  the  same  time  secure 
to  the  defendants  all  the  value  that  the  said  grant- 
ing acts  conferred  upon  the  grantees. 

4.  That  if  Congress  does  not  make  provision  for 
the  disposition  as  aforesaid  of  said  lands,  money, 
timber,  mineral  or  other  deposits,  the  defendants 
may  apply  to  the  court  within  a  reasonable  time, 
but  not  less  than  six  months  from  the  entry  of  this 
decree,  for  a  modification  of  so  much  of  the  in- 
junction herein  ordered  as  forbids  any  disposition 
of  the  said  lands,  timber,  money,  mineral  or  other 
deposits,  or  any  part  thereof,  until  Congress  shall 
act,  and  the  court  hereby  reserves  the  right  to  mod- 
ify this  decree  in  that  regard  if,  in  its  opinion,  good 
cause  shall  then  exist  for  doing  so. 

5.  That  this  decree  shall  apply  not  only  to  all  said 
grant  lands  unsold  at  the  time  this  action  was  insti- 
tuted, but  also  to  all  such  grant  lands  sold  prior  to 
the  institution  of  the  action  which  have  since  re- 
verted or  shall  hereafter  revert  to  the  defendants 
or  any  one  of  them. 


128 

6.  That  this  decree  shall  be  without  prejudice  to 
any  other  suits,  rights  or  remedies  which  the  gov- 
ernment may  have  by  law  or  under  the  Joint  Reso- 
lution of  Congress  passed  April  30,  1908,  or  under 
the  Act  of  Congress  passed  August  20,  1912,  against 
the  defendants  or  any  of  them. 

7.  That  the  complainant  have  and  recover  from 
the  defendants,  Oregon  &  California  Railroad  Com- 
pany, Southern  Pacific  Company,  Stephen  T.  Gage, 
individually  and  as  trustee,  and  Union  Trust  Com- 
pany individually  and  as  trustee,  and  each  of  them, 
its  lawful  costs  and  disbursements  herein,  taxed  at 
$6,249.02,  and  that  execution  issue  therefor. 

Done  in  open  court  this  9th  day  of  December, 
1915. 

BY  THE  COURT. 
Chas.  E.  Wolverton,  Judge. 


129 
APPENDIX  B. 

(  Title  of  Court  and  Cause,  as  contained  in  fore- 
going Decree,  Appendix  A.) 

In  pursuance  of  the  mandate  of  the  Supreme 
Court  of  the  United  States,  filed  in  this  Court  on 
the  — —  day  of  December,  1915,  in  the  above  en- 
titled cause,  counsel  for  the  respective  parties  being 
present,  it  is  by  the  Court  ordered,  adjudged  and 
decreed,  as  follows: 

1.  That  the  decree  heretofore  entered  in  said 
cause,  so  far  as  it  affects  the  defendants  Oregon 
and  California  Railroad  Company,  Southern  Pa- 
cific Company,  Stephen  T.  Gage,  individually  and 
as  trustee,  Union  Trust  Company,  individually  and 
as  trustee,  hereinafter  called  the  "defendants,"  be, 
and  the  same  is,  hereby  set  aside,  and  held  for 
naught,  but  adhered  to  in  all  respects  as  to  the  de- 
fendants and  cross-complainants,  hereinafter  called 
the  "cross-complainants,"  and  the  "interveners." 

2.  That  the  said  defendants  and  their  respective 
officers  and  agents  be  and  each  is  hereby  enjoined 
from  selling  the  lands,  or  any  part  thereof,  granted 
either  by  the  Act  of  Congress  approved  July  25, 
1866,  as  amended  by  the  Act  of  Congress  of  April 
10,  1869,  or  by  the  Act  of  Congress  approved 
May  4,  1870,  whether  the  said  lands  be  situated 
within  the  place  or  indemnity  limits  of  the  grants 
thereby  made,  to  any  person  not  an  actual  settler, 
or  in  quantities  greater  than  one-quarter  section 
to  one  purchaser,  or  for  a  price  exceeding  two  dol- 
lars and  a  half  ($2.50)  per  acre. 


130 

3.  That  the  said  defendants  and  their  respective 
officers  and  agents  be,  and  each  is  hereby  enjoined 
from  any  disposition  of  said  lands,  or  any  part 
thereof,  or  of  the  timber  thereon,  and  from  cutting, 
or  authorizing  the  cutting,  or  removal  of  any  of  the 
timber  thereon,  until  Congress  shall  have  a  reason- 
able opportunity  to  provide  by  legislation  for  the 
disposition  of  said  lands,  in  accordance  with  such 
policy  as  it  may  deem  fitting  under  the  circum- 
stances, and  at  the  same  time  secure  to  the  de- 
fendants, all  the  value  the  granting  acts  conferred 
upon  the  grantees;  but  if  Congress  does  not  make 
such  provision,  the  defendants  may  apply  to  this 
Court,  within  a  reasonable  time,  not  less  than  six 
(6)  months  from  the  entry  of  the  decree  herein, 
for  a  modification  of  so  much  of  the  injunction 
herein  ordered  as  enjoins  any  disposition  of  the 
lands  and  timber  until  Congress  shall  act. 

Done  in  open  court  this day  of ,  1915. 

BY  THE   COURT, 

Judge." 


131 

APPENDIX  C. 

THE  FERRIS  ACT. 

[Public — No.  86 — 64th  Congress.] 
[H.  R.  14864.] 

An  Act  To  alter  and  amend  an  Act  entitled  "An 
Act  granting  lands  to  aid  in  the  construction  of  a 
railroad  and  telegraph  line  from  the  Central  Pacific 
Railroad,  in  California,  to  Portland,  in  Oregon," 
approved  July  twenty-fifth,  eighteen  hundred  and 
sixty-six,  as  amended  by  the  Acts  of  eighteen  hun- 
dred and  sixty-eight  and  eighteen  hundred  and 
sixty-nine,  and  to  alter  and  amend  an  Act  entitled 
"An  Act  granting  lands  to  aid  in  the  construction 
of  a  railroad  and  telegraph  line  from  Portland  to 
Astoria  and  McMinnville,  in  the  State  of  Oregon," 
approved  May  fourth,  eighteen  hundred  and  seventy, 
and  for  other  purposes. 

Whereas  by  the  Acts  of  Congress  approved  April 
tenth,  eighteen  hundred  and  sixty-nine  (Four- 
teenth Statutes  at  Large,  page  two  hundred  and 
thirty-nine),  and  May  fourth,  eighteen  hundred 
and  seventy  (Sixteenth  Statutes  at  Large,  page 
ninety-four),  it  was  provided  that  the  lands 
granted  to  aid  in  the  construction  of  certain  rail- 
roads from  Portland,  in  the  State  of  Oregon,  to 
the  northern  boundary  of  the  State  of  California, 
and  from  Portland  to  Astoria  and  McMinnville, 
in  the  State  of  Oregon,  should  be  sold  to  actual 
settlers  only,  in  quantities  not  exceeding  one 
hundred  and  sixty  acres  to  each  person  and  at 
prices  not  greater  than  $2.50  per  acre;  and 
Whereas  the  Oregon  and  California  Railroad  Com- 
pany, beneficiary  of  said  acts,  has  violated  the 
terms  under  which  the  said  lands  were  granted  by 


132 

selling  certain  of  said  lands  to  persons  other  than 
actual  settlers,  by  selling  in  quantities  of  more 
than  one-quarter  section  to  each  person,  by  sell- 
ing at  prices  in  excess  of  $2.50  per  acre,  and 
by  refusing  to  sell  any  further  portions  of  such 
lands  to  actual  settlers  at  any  price,  and  in  so 
doing  has  willfully  violated  the  terms  of  the 
statutes  by  which  the  said  lands  were  granted; 
and 

Whereas  in  the  suit  instituted  by  the  Attorney 
General  of  the  United  States,  pursuant  to  the 
authority  and  direction  contained  in  the  joint 
resolution  of  April  thirtieth,  nineteen  hundred 
and  eight  (Thirty-fifth  Statutes  at  Large,  page 
five  hundred  and  seventy-one),  the  Supreme 
Court  of  the  United  States,  in  its  decision  ren- 
dered June  twenty-first,  nineteen  hundred  and 
fifteen  (Two  hundred  and  thirty-eighth  United 
States,  page  three  hundred  and  ninety-three), 
ordered  that  the  Oregon  and  California  Railroad 
Company  be  enjoined  from  making  further  sales 
of  lands  in  violation  of  the  law,  and  that  the  said 
railroad  company  be  further  enjoined  from  mak- 
ing any  sales  whatever  of  either  the  land  or  the 
timber  thereon  until  Congress  should  have  a  rea- 
sonable opportunity  to  provide  for  the  disposi- 
tion of  said  lands  in  accordance  with  such  policy 
as  Congress  might  deem  fitting  under  the  cir- 
cumstances and  at  the  same  time  secure  to  the 
railroad  company  all  the  value  conferred  by  the 
granting  Acts;  and 

Whereas  it  was  expressly  provided  by  section  twelve 
of  the  Act  of  July  twenty-fifth,  eighteen  hundred 


133 

and  sixty-six    (Fourteenth    Statutes    at    Large, 
page  two  hundred  and  thirty-nine),  that  Con- 
gress might  at  any  time,  having  due  regard  for 
the  rights  of  the  grantee  railroad  company,  add 
to,  alter,  amend,  or  repeal  the  Act  making  the 
grant ;  and 
Whereas  the  Oregon  and  California  Railroad  Com- 
pany and  its  predecessors  in  interest  received  a 
large  sum  of  money  from  sales  of  said  land  for 
prices  in  excess  of  $2.50   per  acre,  and  from 
leases,  interest  on  contracts,  and  so  forth;  and 
Whereas   the    aforesaid   granting   Acts   conferred 
upon  the  said  railroad  company  the  right  to  re- 
ceive not  more  than  $2.50  per  acre  for  each  acre 
of  land  so  granted:    Therefore 
Be  it  enacted  by  the  Senate  and  House  of  Repre- 
sentatives of  the  United  States  of  America  in  Con- 
gress assembled,  That  the  title  to  so  much  of  the 
lands   granted   by  the   Act   of  July   twenty-fifth, 
eighteen  hundred  and  sixty-six,  entitled  "An  Act 
granting  lands  to  aid  in  the  construction  of  a  rail- 
road and  telegraph  line  from  the  Central  Pacific 
Railroad  in  California  to  Portland,  in  Oregon,"  as 
amended  by  the  Acts  of  eighteen  hundred  and  sixty- 
eight   and   eighteen   hundred   and   sixty-nine,   for 
which  patents  have  been  issued  by  the  United  States, 
or  for  which   the  grantee   is  entitled   to   receive 
patents  under  said  grant,  and  to  so  much  of  the 
lands  granted  by  the  Act  of  May  fourth,  eighteen 
hundred  and  seventy,  entitled   "An  Act  granting 
lands  to  aid  in  the  construction  of  a  railroad  and 
telegraph  line  from  Portland  to  Astoria  and  Mc- 
Minnville,    in    the    State   of    Oregon,"    for    which 


134 

patents  have  been  issued  by  the  United  States,  or 
for  which  the  grantee  is  entitled  to  receive  patents 
under  said  grant,  as  had  not  been  sold  by  the  Ore- 
gon and  California  Railroad  Company  prior  to  July 
first,  nineteen  hundred  and  thirteen,  be,  and  the 
same  is  hereby,  revested  in  the  United  States: 
Provided,  That  the  provisions  of  this  Act  shall  not 
apply  to  the  right  of  way  to  the  extent  of  one  hun- 
dred feet  in  width  on  each  side  of  the  railroad  and 
all  lands  in  actual  use  by  said  railroad  company  on 
December  ninth,  nineteen  hundred  and  fifteen,  for 
depots,  sidetracks,  wood  yards,  and  standing 
grounds. 

Sec.  2.  That  the  Secretary  of  the  Interior,  in 
cooperation  with  the  Secretary  of  Agriculture,  or 
otherwise,  is  hereby  authorized  and  directed,  after 
due  examination  in  the  field,  to  classify  said  lands 
by  the  smallest  legal  subdivisions  thereof  into  three 
classes,  as  follows: 

Class  one.  Power-site  lands,  which  shall  include 
only  such  lands  as  are  chiefly  valuable  for  water- 
power  sites,  which  lands  shall  be  subject  to  with- 
drawal and  such  use  and  disposition  as  has  been  or 
may  be  provided  by  law  for  other  public  lands  of 
like  character. 

Class  two.  Timberlands,  which  shall  include 
lands  bearing  a  growth  of  timber  not  less  than  three 
hundred  thousand  feet  board  measure  on  each  forty- 
acre  subdivision. 

Class  three.  Agricultural  lands,  which  shall  in- 
clude all  lands  not  falling  within  either  of  the  two 
other  classes: 

Provided,  That  any  of  said  lands,  however  classi- 
fied, may  be  reclassified,  if,  because  of  a  change  of 


135 

conditions  or  other  reasons,  such  action  is  required 
to  denote  properly  the  true  character  and  class  of 
such  lands:  Provided  further,  That  all  the  general 
laws  of  the  United  States  now  existing  or  hereafter 
enacted  relating  to  the  granting  of  rights  of  way- 
over  or  permits  for  the  use  of  public  lands  shall  be 
applicable  to  all  lands  title  to  which  is  revested  in 
the  United  States  under  the  provisions  of  this  Act. 
All  lands  disposed  of  under  the  provisions  of  this 
Act  shall  be  subject  to  all  rights  of  way  which  the 
Secretary  of  the  Interior  shall  at  any  time  deem 
necessary  for  the  removal  of  the  timber  from  any 
lands  of  class  two. 

Sec.  3.  That  the  classification  provided  for  by 
the  preceding  section  shall  not  operate  to  exclude 
from  exploration,  entry,  and  disposition,  under  the 
mineral-land  laws  of  the  United  States,  any  of  said 
lands,  except  power  sites,  which  are  chiefly  valuable 
for  the  mineral  deposits  contained  therein,  and  the 
general  mineral  laws  are  hereby  extended  to  all  of 
said  lands,  except  power  sites:  Provided,  That  any 
person  entering  mineral  lands  of  class  two  shall 
not  acquire  title  to  the  timber  thereon,  which  shall 
be  sold  as  hereinafter  provided  in  section  four,  but 
he  shall  have  the  right  to  use  so  much  of  the  timber 
thereon  as  may  be  necessary  in  the  development  and 
operation  of  his  mine  until  such  time  as  such  timber 
is  sold  by  the  United  States. 

Sec.  4.  That  nonmineral  lands  of  class  two  shall 
not  be  disposed  of  until  the  Secretary  of  the  In- 
terior has  determined  and  announced  that  the  mer- 
chantable timber  thereon  has  been  removed,  and 
thereupon  said  lands  shall  fall  into  class  three  and 


136 

be  disposed  of  in  the  manner  hereinafter  provided 
for  the  disposal  of  lands  of  that  class. 

The  timber  on  lands  of  class  two  shall  be  sold 
for  cash  by  the  Secretary  of  the  Interior,  in  co- 
operation with  the  Secretary  of  Agriculture,  or 
otherwise,  to  citizens  of  the  United  States,  associa- 
tions of  such  citizens,  and  corporations  organized 
under  the  laws  of  the  United  States,  or  any  State, 
Territory,  or  District  thereof,  at  such  times,  in  such 
quantities,  and  under  such  plan  of  public  competi- 
tive bidding  as  in  the  judgment  of  the  Secretary  of 
the  Interior  may  produce  the  best  results:  Provided, 
That  said  Secretary  shall  have  the  right  to  reject 
any  bid  where  he  has  reason  to  believe  that  the 
price  offered  is  inadequate,  and  may  reoffer  the 
timber  until  a  satisfactory  bid  is  received :  Provided 
further,  That  upon  application  of  a  qualified  pur- 
chaser that  any  legal  subdivision  shall  be  separately 
offered  for  sale  such  subdivision  shall  be  separately 
offered  before  being  included  in  any  offer  of  a 
larger  unit,  if  such  application  be  filed  within 
ninety  days  prior  to  such  offer:  And  provided  fur- 
ther, That  said  timber  shall  be  sold  as  rapidly  as 
reasonable  prices  can  be  secured  therefor  in  a 
normal  market. 

The  Secretary  of  the  Interior  shall  as  soon  as  the 
purchase  price  is  fully  paid  by  any  person  purchas- 
ing under  the  provisions  of  this  section  issue  to  such 
purchaser  a  patent  conveying  the  timber  and  ex- 
pressly reserving  the  land  to  the  United  States. 
The  timber  thus  purchased  may  be  cut  and  removed 
by  the  purchaser,  his  heirs  or  assigns,  within  such 
period  as  may  be  fixed  by  the  Secretary  of  the  In- 


137 

terior,  which  period  shall  be  designated  in  the 
patent;  all  rights  under  said  patent  shall  cease 
and  terminate  at  the  expiration  of  said  period: 
Provided,  That  in  the  event  the  timber  is  removed 
prior  to  the  expiration  of  said  period  the  Secretary 
of  the  Interior  shall  make  due  announcement 
thereof,  whereupon  all  rights  under  the  patent  shall 
cease. 

No  timber  shall  be  removed  until  the  issuance  of 
patent  therefor.  All  timber  sold  under  this  Act 
shall  be  subject  to  the  taxing  power  of  the  States 
apart  from  the  land  as  soon  as  patents  are  issued 
as  provided  for  herein. 

Sec.  5.  That  nonmineral  lands  of  class  three 
shall  be  subject  to  entry  under  the  general  provi- 
sions of  the  homestead  laws  of  the  United  States, 
except  as  modified  herein,  and  opened  to  entry  in 
accordance  with  the  provisions  of  the  Act  of 
September  thirtieth,  nineteen  hundred  and  thirteen 
(Thirty-eighth  Statutes  at  Large,  page  one  hundred 
and  thirteen).  Fifty  cents  per  acre  shall  be  paid 
at  the  time  the  original  entry  is  allowed  and  $2  per 
acre  when  final  proof  is  made.  The  provisions  of 
section  twenty-three  hundred  and  one,  Revised 
Statutes,  shall  not  apply  to  any  entry  hereunder 
and  no  patent  shall  issue  until  the  entryman  has 
resided  upon  and  cultivated  the  land  for  a  period 
of  three  years,  proof  of  which  shall  be  made  at  any 
time  within  five  years  from  date  of  entry.  The  area 
cultivated  shall  be  such  as  to  satisfy  the  Secretary 
of  the  Interior  that  the  entry  is  made  in  good  faith 
for  the  purpose  of  settlement  and  not  for  specula- 
tion :  Provided,  That  the  payment  of  $2.50  per  acre 


138 

shall  not  be  required  from  homestead  entrymen 
upon  lands  of  class  two  when  the  same  shall  become 
subject  to  entry  as  agricultural  lands  in  class  three: 
Provided  further,  That  during  the  period  fixed  for 
the  submission  of  applications  to  make  entry  under 
this  section  any  person  duly  qualified  to  enter  such 
lands  who  has  resided  thereon  to  the  same  extent 
and  in  the  same  manner  as  is  required  under 
the  homestead  laws,  since  the  first  day  of 
December,  nineteen  hundred  and  thirteen,  and  who 
has  improved  the  land  and  devoted  some  portion 
thereof  to  agricultural  use,  and  who  shall  have 
maintained  his  residence  to  the  date  of  such  appli- 
cation, shall  have  the  preferred  right  to  enter  the 
quarter  section  upon  which  he  was  so  residing 
whether  such  lands  shall  be  of  class  two  or  class 
three  and  where  such  quarter  section  does  not  con- 
tain more  than  one  million  two  hundred  thousand 
feet  board  measure  of  timber,  and  where  the  quarter 
section  contains  more  than  the  said  quantity  of 
timber  such  person  may  enter  the  forty-acre  tract, 
or  lot  or  lots  containing  approximately  forty  acres, 
upon  which  his  improvements,  or  the  greater  part 
thereof,  are  situated:  Provided  further,  That  a 
prior  exercise  of  the  homestead  right  by  any  such 
person  shall  not  be  a  bar  to  the  exercise  of  such 
preference  rights:  And  provided  further,  That  all 
of  the  following  described  lands  which  may  become 
revested  in  the  United  States  by  operation  of 
this  Act,  to-wit:  Township  one  south,  range  five 
east,  sections  twenty-three  and  thirty-five  township 
one  south,  range  six  east,  sections  three,  five,  seven, 
nine,   seventeen,  nineteen,   twenty-nine,   thirty-one, 


139 

and  thirty-three;  township  two  south,  range  five 
east,  sections  one  and  three;  township  two  south, 
range  six  east,  sections  one,  three,  five,  seven,  nine, 
and  eleven;  township  two  south,  range  seven  east, 
section  seven;  township  three  south,  range  three 
east,  section  fifteen;  township  four  south,  range 
four  east,  sections  eleven  and  thirteen;  township 
four  south,  range  five  east,  sections  nineteen  and 
twenty-nine;  and  township  twelve  south,  range 
seven  west,  sections  fifteen,  twenty-one,  twenty- 
three,  twenty-seven,  thirty-three,  and  thirty-five, 
Willamette  meridian  and  base,  State  of  Oregon, 
shall  be  withheld  from  entry  or  other  disposition 
for  a  period  of  two  years  after  the  approval  hereof. 

Sec.  6.  That  persons  who  purchase  timber  on 
lands  of  class  two  shall  be  required  to  pay  a  com- 
mission of  one-fifth  of  one  per  centum  of  the  pur- 
chase price  paid,  to  be  divided  equally  between  the 
register  and  receiver,  within  the  maximum  compen- 
sation allowed  them  by  law;  and  the  register  and 
receiver  shall  receive  no  other  compensation  what- 
ever for  services  rendered  in  connection  with  the 
sales  of  timber  under  the  provisions  of  section  four 
of  this  Act. 

Sec.  7.  That  the  Attorney  General  of  the  United 
States  be,  and  he  is  hereby,  authorized  and  directed 
to  institute  and  prosecute  any  and  all  suits  in  equity 
and  actions  at  law  against  the  Oregon  and  Cali- 
fornia Railroad  Company,  and  any  other  proper 
party  which  he  may  deem  appropriate,  to  have  de- 
termined the  amount  of  moneys  which  have  been  re- 
ceived by  the  said  railroad  company  or  its  prede- 
cessors from  or  on  account  of  any  of  said  granted 


140 

lands,  whether  sold  or  unsold,  patented  or  unpat- 
ented, and  which  should  be  charged  against  it  as  a 
part  of  the  "full  value"  secured  to  the  grantees 
under  said  granting  Acts  as  heretofore  interpreted 
by  the  Supreme  Court.  In  making  this  determina- 
tion the  court  shall  take  into  consideration  and  give 
due  and  proper  legal  effect  to  all  receipts  of  money 
from  sales  of  land  or  timber,  forfeited  contracts, 
rent,  timber  depredations,  and  interest  on  contracts, 
or  from  any  other  source  relating  to  said  lands ;  also 
to  the  value  of  timber  taken  from  said  lands  and 
used  by  said  grantees  or  their  successor  or  succes- 
sors. In  making  this  determination  in  the  afore- 
mentioned suit  or  suits  the  court  shall  also  determine 
on  the  application  of  the  Attorney  General,  the 
amount  of  the  taxes  on  said  lands  paid  by  the 
United  States,  as  provided  in  this  Act,  and  which 
should  in  law  have  been  paid  by  the  said  Oregon  and 
California  Railroad  Company,  and  the  amount  thus 
determined  shall  be  treated  as  money  received  by 
said  railroad  company. 

Sec.  8.  That  the  title  to  all  money  arising  out  of 
said  grant  lands  and  now  on  deposit  to  await  the 
final  outcome  of  said  suit  commenced  by  the  United 
States  in  pursuance  of  said  joint  resolution  of  nine- 
teen hundred  and  eight  is  hereby  vested  in  the 
United  States,  and  the  United  States  is  subrogated 
to  all  the  rights  and  remedies  of  the  obligee  or 
obligees,  and  especially  of  Louis  L.  Sharp  as  com- 
missioner, under  any  contract  for  the  purchase  of 
timber  on  the  grant  lands. 

Sec.  9.  That  the  taxes  accrued  and  now  unpaid 
on  the  lands  revested  in  the  United  States,  whether 


141 

situate  in  the  State  of  Oregon  or  State  of  Washing- 
ton, shall  be  paid  by  the  Treasurer  of  the  United 
States,  upon  the  order  of  the  Secretary  of  the  In- 
terior, as  soon  as  may  be  after  the  approval  of  this 
Act,  and  a  sum  sufficient  to  make  such  payment  is 
hereby  appropriated,  out  of  any  money  in  the  Treas- 
ury not  otherwise  appropriated. 

Sec.  10.  That  all  moneys  received  from  or  on 
account  of  said  lands  and  timber  under  the  pro- 
visions of  this  Act  shall  be  deposited  in  the  Treas- 
ury of  the  United  States  in  a  special  fund,  to  be 
designated  "The  Oregon  and  California  land-grant 
fund,"  which  fund  shall  be  disposed  of  in  the  follow- 
ing manner :  The  Secretary  of  the  Interior  shall  as- 
certain as  soon  as  may  be  the  exact  number  of  acres 
of  said  lands,  sold  or  unsold,  patented  to  the  Oregon 
and  California  Railroad  Company,  or  its  predeces- 
sors, and  the  number  of  acres  of  unpatented  lands 
which  said  railroad  company  is  entitled  to  receive 
under  the  terms  of  said  grants  and  the  value  of  said 
lands  at  $2.50  per  acre.  From  the  sum  thus  ascer- 
tained he  shall  deduct  the  amount  already  received 
by  the  said  railroad  company  and  its  predecessors  in 
interest  on  account  of  said  lands  and  which  should 
be  charged  against  it  as  determined  under  section 
seven  of  this  Act;  and  a  sum  equal  to  the  balance 
thus  resulting  shall  be  paid,  as  herein  provided,  to 
the  said  railroad  company,  its  successors  or  assigns, 
and  to  those  having  liens  on  the  land,  as  their  re- 
spective interests  may  appear.  The  amount  due 
lien  holders  shall  be  evidenced  either  by  the  consent, 
in  writing,  of  the  railroad  company  or  by  a  judg- 
ment of  a  court  of  competent  jurisdiction  in  a  suit 


142 

to  which  the  railroad  company  and  the  lien  holders 
are  parties.  Payments  shall  be  made  from  time  to 
time,  as  the  fund  accumulates,  by  the  Treasurer  of 
the  United  States  upon  the  order  of  the  Secretary  of 
the  Interior:  Provided,  however,  That  if,  upon  the 
expiration  of  ten  years  from  the  approval  of  this 
Act,  the  proceeds  derived  from  the  sale  of  lands  and 
timber  are  not  sufficient  to  pay  the  full  amount 
which  the  said  railroad  company,  its  successors  or 
assigns,  are  entitled  to  receive,  the  balance  due  shall 
be  paid  from  the  general  funds  in  the  Treasury  of 
the  United  States,  and  an  appropriation  shall  be 
made  therefor.  After  the  said  railroad  company, 
its  successors  or  assigns,  and  the  lien  holders  shall 
have  been  paid  the  amount  to  which  they  are  en- 
titled, as  provided  herein,  an  amount  equal  to  that 
paid  for  accumulated  taxes,  as  provided  in  section 
nine  hereof,  shall  be  deposited  in  the  Treasury  to 
the  credit  of  the  United  States,  thereafter  all  other 
moneys  received  from  the  sales  of  land  and  timber 
shall  be  distributed  as  follows: 

A  separate  account  shall  be  kept  in  the  General 
Land  Office  of  the  sales  of  land  and  timber  within 
each  county  in  which  any  of  said  lands  are  situated, 
and,  after  deducting  from  the  amount  of  the  pro- 
ceeds arising  from  such  sales  in  each  county  a  sum 
equal  to  that  applied  to  pay  the  accrued  taxes  in 
that  county  and  a  sum  equal  to  $2.50  per  acre  for 
each  acre  of  such  land  therein  title  to  which  is  re- 
vested in  the  United  States  under  this  Act,  twenty- 
five  per  centum  of  the  remainder  shall  be  paid  to 
the  State  treasurer  of  the  State  in  which  the  land  is 
located,  to  be  and  become  a  part  of  the  irreducible 


143 

school  fund  of  the  State;  twenty-five  per  centum 
shall  be  paid  to  the  treasurer  of  the  county  for  com- 
mon schools,  roads,  highways,  bridges,  and  port  dis- 
tricts, to  be  apportioned  by  the  county  courts  for  the 
several  purposes  above  named;  forty  per  centum 
shall  be  paid  into,  reserved,  and  appropriated  as  a 
part  of  the  fund  created  by  the  Act  of  Congress  ap- 
proved June  sevententh,  nineteen  hundred  and  two, 
known  as  the  reclamation  Act ;  ten  per  centum  shall 
become  a  part  of  the  general  fund  in  the  Treasury 
of  the  United  States ;  and  of  the  balance  remaining 
in  said  Oregon  and  California  land  grant  fund  from 
whatsoever  source  derived  twenty-five  per  centum 
shall  be  paid  to  the  State  treasurer  of  the  State  in 
which  the  land  is  located,  to  be  and  become  a  part  of 
the  irreducible  school  fund  of  the  State ;  twenty-five 
per  centum  shall  be  paid  to  the  treasurer  of  the 
county    for    common    schools,     roads,    highways, 
bridges,  and  port  districts,  to  be  apportioned  by  the 
county  courts  for  the  several  purposes  above  named ; 
and  the  remainder  shall  become  a  part  of  the  gen- 
eral fund  in  the  Treasury  of  the  United  States.  The 
payments  herein  authorized  shall  be  made  to  the 
treasurers  of  the  States  and  counties,  respectively, 
by  the  Treasurer  of  the  United  States,  upon  the 
order  of  the  Secretary  of  the  Interior,  as  soon  as 
may  be  after  the  close  of  each  fiscal  year  during 
which  the  moneys  were  received:    Provided,  That 
none  of  the  payments  to  the  States  and  counties 
and  to  the  reclamation  fund  in  this  section  provided 
for  shall  be  made  until  the  amount  due  the  Oregon 
and  California  Railroad  Company,  its  successors  or 
assigns,  has  been  fully  paid,  and  the  Treasury  re- 


144 

imbursed  for  all  taxes  paid  pursuant  to  the  pro- 
visions of  section  nine  of  this  Act. 

Sec.  11.  That  the  Secretary  of  the  Interior  is 
hereby  authorized  to  perform  any  and  all  acts  and 
to  make  such  rules  and  regulations  as  may  be  neces- 
sary and  proper  for  the  purpose  of  carrying  the 
provisions  of  this  Act  into  full  force  and  effect ;  and 
any  person,  applicant,  purchaser,  entryman,  or  wit- 
ness who  shall  swear  falsely  in  any  affidavit  or  pro- 
ceeding required  hereunder  or  under  the  regula- 
tions issued  by  the  Secretary  of  the  Interior  shall 
be  guilty  of  perjury  and  liable  to  the  penalties  pre- 
scribed therefor. 

Sec.  12.  That  the  sum  of  $100,000  be,  and  the 
same  is  hereby,  appropriated,  out  of  any  moneys  in 
the  Treasury  not  otherwise  appropriated,  to  enable 
the  Secretary  of  the  Interior,  in  cooperation  with 
the  Secretary  of  Agriculture,  or  otherwise,  to  com- 
plete the  classification  of  the  lands  as  herein  pro- 
vided, which  amount  shall  be  immediately  available 
and  shall  remain  available  until  such  classification 
shall  have  been  completed. 

Approved,  June  9,  1916. 


No.  4=92. 

Jn  the  £tap«mt  tymat  of  tfo  itniM  £tete& 

October  Term,  1916. 


Oregon  &  California  Railroad  Company  etal., 
appellants, 

V. 

The  United  States. 


ON  A  CERTIFICATE  FROM  AND  CERTIORARI  TO  THE  UNITED 
STATES  CIRCUIT  COURT  OF  APPEALS  FOR  THE  NINTH 
CIRCUIT. 


BEIEF  FOE  THE  UNITED  STATES. 


WASHINGTON  :  GOVERNMENT  PRINTING  OFFICE  :  1017 


INDEX. 


POINTS   DISCUSSED. 

Page. 

STATEMENT.,  1 

ARGUMENT 6-51 

I.  The  decree  of  the  lower  court  is  in  exact  har- 
mony with  the  mandate 6-23 

A.  Section  1  is  valid 6 

B.  Section  2  is  valid 7-16 

1.  An  actual  settler  is  one  who  has  estab- 

lished an  habitation  on  the  land  pur- 
chased   7 

2.  The  word  "lands"  has  the  same  mean- 

ing in  the  restrictive  provisos  as  it  has 
in  the  granting  clauses  of  the  granting 
acts 7 

3.  "Land"    ordinarily    comprehends    not 

only  the  surface,  but  also  the  timber 
growing  on  it  and  minerals  beneath 
it 9 

4.  To  exclude  by  construction  the  timber 

and  minerals  from  the  operation  of 
the  restrictive  conditions  would  defeat 
the  latter 10 

5.  According  to  the  decision  of  this  court 

the  timber  and  minerals  are  a  part  of 

the  lands 12 

6.  This  court  having  decided  that  the  re- 

strictive provisos  relate  to  the  timber 
and  minerals  as  well  as  the  surface, 

the  question  is  res  judicata 15 

C.  Section  3  is  valid 16 

D.  Section  4  is  valid 17 

E.  Section  5  is  valid 18 

F.  Section  6  is  valid 19 

(i) 


n 

AEGUMENT— Continued.  Page. 

G.  Why  the  lower  court  deemed  it  necessary  to 

specifically  mention  timber  and  minerals 

and  to  prohibit  their  disposition  except  as 

a  part  of  and  in  conjunction  with  the  area 

containing  them 19 

H.  When  the  trial  court  assessed  costs  against 
the   defendants  it  was  acting   within  its 

power  under  the  mandate 20 

II.  The  Chamberlain -Ferris  Act  is  a  proper  ex- 
ercise of  power  by  Congress 23-48 

A.  Congress  had  power  to  revest  the  title 23-31 

1.  Power  reserved  in  the  Act  of  1866 25 

2.  Power  of  eminent  domain 27 

3.  Equity  always  has  power  to  grant  ade- 

quate relief _ 28 

B.  Appellants    have    no    cause    for    complaint 

against  the  act 31 

C.  The  Chamberlain-Ferris  Act  secures  to  the 

appellants  "all  the  value"  conferred  by 

the  granting  acts  upon  the  railroads 32-48 

1.  Certain  rights  claimed  by  appellants. _ _  40 

2.  Cases  cited  by  appellants 43 

3.  The  Union  Trust  Company 45 

4.  "  Uncompensated  services  " 47 

HI.  The    court   has   power   to   determine    the 

validity  of  the  Chamberlain- Ferris  Act  in 
connection  with  this  appeal 48-51 

CASES  CITED. 

B. 

Beard  v.  Knox,  5  Cal.  252 24 

Brewster  v.  Lanyon  Zinc  Co.,  140  Fed.  801 29 

C. 

Cherokee  Nation  v.  Kansas  Railway  Co.  135  U.  S.  641 .         28 
Clark  Distilling  Co.  v.  Western,  etc.  Ry.  Co.  (Decided 

Jany.  7,  1917) 49 

Cromwell  v.  County  of  Sac,  4  Otto  351  __ 16, 19 


Ill 

^'  Page. 

Dowellv.  Applegate,  152  U.  S.  327 r... 15,19 

F. 
Fletcher  v.  Peck,  6  Cranch  87 43,  45 

G. 

Green  Bay  <&  M.  Canal  Co.  v.  TelulaJi  Paper  Co.,  140 

Wis.  417 10 

H. 

Higgins  Fuel  &  Oil  Co.  et  al.  v.  Snow  et  al.,  113  Fed. 

433 9 

Hill  v.  Sumner,  132  U.  S.  118 24 

I. 

In  re  Potts,  166  U.  S.  263 50 

In  re  Sanford  Fori  &  Tool  Co.,  160  U.  S.  247 16 

K. 

King  v.  Ackerman,  2  Black  408 24 

Kinsley  v.  Holbrook,  45  N.  H.  313 10 

M. 

McCulloch  v.  Maryland,  4  Wheat.  315 24 

Missouri,  K.  cfc  T.  Trust  Co.  v.  Krumseig,  172  U.  S. 
351 29 

N. 

Nesbit  v.  Riverside  Independent  District,  144  U.  S.  610.   15, 19 
Northern  Pacific  R.  Co.  v.  Slaght,  205  U.  S.  122 15,  19 

O. 

Oregon  &  California  R.  R.  Co.  v.  United  States,  238  U. 

S.  393.  7,10,11,12,17,18,19,23,27,29,30,31,41,42,46 

P. 

Payne  v.  Hook,  7  Wall.  425... 29 

Pearre  &  Co.  v.  Hawkins,  62  Tex.  434 24 

Phelps  v.  Harris,  101  U.  S.  370. 24 

Philadelphia    Trust,    etc.,    Co.    v.    Merchantville,     74 

N.  J.  Eq.  330 10 


IV 

S. 

Page. 

Sage  v.  Central  Railroad  Co.,  9  Otto  334 29 

Schulenberg  v.  Harriman,  21  Wall.  44 43 

Sharon  v.  Tucker,  144  U.  S.  533 28 

Sinking  Fund  Cases,  99  U.  S.  700 26 

Southern  Oregon  Co.  v.  United  States,  C.  C.  A.-9,  Feb. 

13*1917 13,14 

State  v.  Jones,  143  la.  398 10 

Sweet  y.  Rechel,  159  U.  S.  380 28 

T. 
Tyler  Min.  Co.  v.  Sweeney,  79  Fed.  277 21 

U. 

United    States   v.    Gettysburg    Electric   Railway,    160 

U.S.  668 ----  27 

United  States  v.  Gratiot,  14  Pet.  526 24 

United  States  v.  Jones,  109  U.  S.  513 26 

United  States  v.  Mormon  Church,  150  U.  S.  145 49 

V. 

Virginia- Carolina  Chemical  Co.  v.  Kirven,  215  U.  S. 
252 16,  19 

W. 

Williams,  lessee,  v.  Veatch,  17  Ohio  171 24 

Woodbridge  v.  Jones,  103  Mass.  549 24 

TEXTBOOKS  CITED. 

Bispham's  Principles  of  Equity,  sec.  7 28 

2  Bl.  Comm.  16-18. 10 

CokeLitt.  4a 10 

1  Pom.  Eq.  Jur.,  sec.  170 28 

1  Washburn,  Keal  Property,  p.  3 9 

STATUTES   CITED. 

14  Stat.  239 7,8,25,41 

15  Stat.,  340 13 

16  Stat.  47 7,8,41 

16  Stat.  94 '. 7,8,41 

Act  of  June  9,  1916  (Chamberlain  Ferris  Act),  39  Stat. 

218 23-51,  passim 


October  Term,  1916. 


Oregon  &  California  Railroad  Com- 
pany et  al.,  appellants, 
v. 
The  United  States. 


No.  492. 


ON  A  CERTIFICATE  FROM  AND  CERTIORARI  TO  THE  UNITED 
STATES  CIRCUIT  COURT  OF  APPEALS  FOR  THE  NINTH 
CIRCUIT. 


BRIEF  FOR  THE  UNITED  STATES. 


STATEMENT. 


This  court  reversed  the  above  entitled  case  and 
sent  it  back  to  the  lower  court  with  instructions  to 
enter  a  decree  in  accordance  with  the  court's  opinion, 
which  was  embodied  in  the  mandate.  It  also  by 
necessary  implication  referred  to  Congress  the  dis- 
position within  stated  limits  of  the  land  involved. 
For  the  purpose  of  this  statement  the  pertinent  parts 
of  the  opinion  are: 

This,  then,  being  the  situation  resulting  from 
conditions  now  existing,  incident,  it  may  be, 
to  the  prolonged  disregard  of  the  covenants 
(i) 


by  the  railroad  company,  the  lands  invite  now 
more  to  speculation  than  to  settlement,  and 
we  think,  therefore,  that  the  railroad  com- 
pany should  not  only  be  enjoined  from  sales 
in  violation  of  the  covenants,  but  enjoined 
from  any  disposition  of  them  whatever  or  of 
the  timber  thereon,  and  from  cutting  or 
authorizing  the  cutting  or  removal  of  any  of 
the  timber  thereon,  until  Congress  shall  have 
a  reasonable  opportunity  to  provide  by  legis- 
lation for  their  disposition  in  accordance  with 
such  policy  as  it  may  deem  fitting  under  the 
circumstances  and  at  the  same  time  secure 
to  the  defendants  all  the  value  the  granting 
acts  conferred  upon  the  railroads. 

If  Congress  does  not  make  such  provision 
the  defendants  may  apply  to  the  District 
Court  within  a  reasonable  time,  not  less  than 
six  months,  from  the  entry  of  the  decree  herein, 
for  a  modification  of  so  much  of  the  injunction 
herein  ordered  as  enjoins  any  disposition  of 
the  lands  and  timber  until  Congress  shall  act, 
and  the  court  in  its  discretion  may  modify  the 
decree  accordingly. 

Decree  reversed  and  cause  remanded  to  the 
District  Court  for  further  proceedings  in  ac- 
cordance with  this  opinion.  (238  U.  S.  pp. 
438-439.) 

The  decree  entered  by  the  trial  court  and  the  one 
proposed  by  the  defendants  are  given  below  in  paral- 
lel columns.  What  appears  in  the  one  but  not  in  the 
other  is  italicized;  thus  is  marked  the  difference  be- 
tween the  two. 


(Decree  of  the  Court,  title,  attestation 
clause,  and  name  of  judge,  omitted.) 

In  pursuance  of  the  mandate  of 
the  Supreme  Court  of  the  United 
States,  filed  in  this  court  on  the  8th 
day  of  December,  1915,  in  the  above 
entitled  cause,  counsel  for  the  re- 
spective parties  being  present,  it  is 
by  the  Court  ordered,  adjudged  and 
decreed,  as  follows: 

1.  That  the  decree  heretofore  en- 
tered in  said  cause,  so  far  as  it  affects 
the  defendants  Oregon  and  California 
Railroad  Company,  Southern  Pacific 
Company,  Stephen  T.  Gage,  indi- 
vidually and  as  trustee,  Union  Trust 
Company,  individually  and  as  trus- 
tee, hereinafter  called  "the  defend- 
ants," be,  and  the  same  is  hereby 
set  aside,  and  held  for  naught,  but  is 
adhered  to  in  all  repects  as  to  the 
defendants  and  cross-complainants, 
hereinafter  called  the  "cross-com- 
plainants," and  the  interveners. 

2.  That  the  defendants  and  their 
respective  officers  and  agents  be, 
and  each  is  hereby,  enjoined  from 
selling  the  lands  or  any  part  thereof 
granted  either  by  the  Act  of  Congress 
approved  July  25,  1866,  as  amended 
by  the  Act  of  Congress  of  April  10, 
1869,  or  by  the  Act  of  Congress  ap- 
proved May  4,  1870,  whether  the 
said  lands  be  situated  within  the 
place  or  indemnity  limits  of  the 
grants  thereby  made,  to  any  person 
not  an  actual  settler  on  the  land  sold 
to  him,  or  in  quantities  greater  than 
one-quarter  section  to  one  purchaser, 
or  for  a  price  exceeding  $2.50  per 
acre:  and  from  selling  any  of  the 
timber  on  said  lands,  or  any  mineral 
or  other  deposits  therein,  except  as  a 
part  of  and  in  conjunction  aith  the 
land  on  which  the  timber  stands  or  in 
which  the  mineral  or  other  deposits  are 
found;  and  from  cutting  or  removing 
or  authorizing  the  cutting  or  removal  of 

83047—17 2 


(Decree  requested  by  appellants,  title 
and  attestation  clause  omitted.) 

In  pursuance  of  the  mandate  of  the 
Supreme  Court  of  the  United  States, 

filed  in  this  court  on  the day  of 

December,  1915,  in  the  above  en- 
titled cause,  counsel  for  the  respect- 
ive parties  being  present,  it  is  by  the 
Court  ordered,  adjudged  and  de- 
creed, as  follows: 

1.  That  the  decree  heretofore  en- 
tered in  said  cause,  so  far  as  it  affects 
the  defendants  Oregon  and  Cali- 
fornia Railroad  Company,  Southern 
Pacific  Company,  Stephen  T.  Gage, 
individually  and  as  trustee,  Union 
Trust  Company,  individually  and  as 
trustee,  hereinafter  called  the  "de- 
fendants," be,  and  the  same  is  hereby 
set  aside,  and  held  for  naught,  but 
adhered  to  in  all  respects  as  to  the 
defendants,  and  cross-complainants, 
hereinafter  called  the  "cross-com- 
plainants," and  the  "interveners." 

2.  That  the  said  defendants  and 
their  respective  officers  and  agents 
be  and  each  is  hereby  enjoined  from 
selling  the  lands,  or  any  part  thereof, 
granted  either  by  the  Act  of  Congress 
approved  July  25,  1866,  as  amended 
by  the  Act  of  Congress  of  April  10, 
1869,  or  by  the  Act  of  Congress  ap- 
proved May  4,  1870,  whether  the 
said  lands  be  situated  within  the 
place  or  indemnity  limits  of  the 
grants  thereby  made,  to  any  person 
not  an  actual  settler,  or  in  quantities 
greater  than  one-quarter  section  to 
one  purchaser,  or  for  a  price  exceed- 
ing two  dollars  and  a  half  ($2.50)  per 
acre. 


any  of  the  timber  thereon;  or  from 
removing  or  authorizing  the  removal 
of  mineral  or  other  deposits  therein, 
except  in  connection  with  the  sale  of  the 
land  bearing  the  timber  or  containing 
the  mineral  or  other  deposits. 

3.  That  the  defendants  and  their 
respective  officers  and  agents  be,  and 
each  is  hereby,  enjoined  from  making 
or  agreeing  to  make,  either  directly  or 
indirectly,  any  disposition  whatso- 
ever of  said  lands  or  of  any  part  there- 
of, or  of  the  timber  thereon  or  any 
part  thereof,  or  of  any  mineral  or  other 
deposits  therein;  from  cutting,  remov- 
ing, or  authorizing  the  cutting  or 
removal  of  the  timber  thereon  or  any 
part  thereof ;  from  removing  or  author- 
izing the  removal  of  mineral  or  other 
deposits  therein;  and  from  disposing  of, 
receiving  or  exerting  any  control  over 
any  money  which  arose,  or  may  here- 
after arise,  from  said  lands,  either 
through  sales  thereof  or  of  timber 
thereon,  or  through  condemnation  pro- 
ceedings or  otherwise,  and  now  on  de- 
posit, or  which  may  hereafter  be  placed 
on  deposit,  with  any  bank,  clerk  of 
of  court,  or  other  institution  or  person, 
to  await  the  final  decision  of  the  Su- 
preme Court  of  the  United  States  in 
this  case,  until  Congress  shall  have  a 
reasonable  opportunity  to  make  pro- 
vision by  legislation  for  the  disposi- 
tion of  said  lands,  timber,  money, 
mineral  or  other  deposits,  in  accord- 
ance with  such  policy  as  Congress 
may  deem  fitting,  under  the  circum- 
stances, and  at  the  same  time  secure 
to  the  defendant  all  the  value  that  the 
said  granting  acts  conferred  upon  the 
grantees. 

4.  That  if  Congress  does  not  make 
provision  for  the  disposition  as  afore- 
said of  said  lands,  money,  timber, 
mineral  or  other  deposits,  the  defend- 
ants may  apply  to  the  Court  within 


3.  That  the  said  defendants  and 
their  respective  officers  and  agents 
be,  and  each  is  hereby  enjoined  from 
any  disposition  of  the  said  lands,  or 
any  part  thereof,  or  of  the  timber 
thereon,  and  from  cutting,  or  author- 
izing the  cutting,  or  removal  of  any 
of  the  timber  thereon,  until  Congress 
shall  have  a  reasonable  opportunity 
to  provide  by  legislation  for  the  dis- 
position of  said  lands,  in  accordance 
with  such  policy  as  it  may  deem  fit- 
ting under  the  circumstances,  and  at 
the  same  time  secure  to  the  defend- 
ants, all  the  value  the  granting  acts 
conferred  upon  the  grantees; 


but  if  Congress  does  not  make  such 
provision,  the  defendants  may  ap- 
ply to  this  Court,  within  a  reason- 
able time,  not  less  than  six  (6) 
months  from  the  entry  of  the  decree 


a  reasonable  time,  but  not  less  than     herein,  for  a  modification  of  so  much 

six  months  from  the  entry  of  this     of  the  injunction  herein  ordered  as 

decree,  for  a  modification  of  so  much     enjoins  any  disposition  of  the  lands 

of  the  injunction  herein  ordered  as     and  timber  until  Congress  shall  act. 

forbids  any  disposition  of  the  said 

lands,    timber,    money,    mineral   or 

other  deposits,   or  any   part   thereof, 

until  Congress  shall  act,  and  the  Court 

hereby  reserves  the  right  to  modify  this 

decree  in  that  regard  if,  in  its  opinion, 

good  cause  shall  then  exist  for  doing  so. 

5.  That  this  decree  shall  apply  not 
only  to  all  said  grant  lands  unsold  at 
the  time  this  action  was  instituted, 
but  also  to  all  such  grant  lands  sold 
prior  to  the  institution  of  the  action 
which  have  since  reverted  or  shall  here- 
after revert  to  the  defendants  or  any 
one  of  them. 

6.  That  this  decree  shall  be  without 
prejudice  to  any  other  suits,  rights,  or 
remedies  which  the  Government  may 
have  by  law  or  under  the  Joint  Reso- 
lution of  Congress  passed  April  30, 
1908,  or  under  the  Act  of  Congress 
passed  August  30,  1912,  against  the 
defendants  or  any  of  them. 

7.  That  the  complainant  have  and 
recover  from  the  defendants,  Oregon 
and  California  Railroad  Company, 
Southern  Pacific  Company,  Stephen 
T.  Gage,  individually  and  as  trustee, 
and  Union  Trust  Company,  individ- 
ually and  as  trustee,  and  each  of  them, 
its  lauful  costs  and  disbursements 
herein,  taxed  at  $6,249.02,  and  that 
execution  issue  therefor. 

Assignments  of  error  were  filed  by  the  defendants 
in  which  they  complained  of  the  decree  generally, 
although  it  contains  much  that  was  requested  by 
them.  Many  of  the  assignments  relate  to  questions 
that  had  been  decided  by  this  court  adversely  to 
the  defendants.  In  due  time  defendants  appealed  to 
the  Circuit  Court  of  Appeals,   which  certified  cer- 


6 

tain  questions  to  this  court.  Afterwards,  upon  the 
application  of  the  Government,  the  appellants  con- 
senting, this  court  ordered  up  the  entire  case  for 
final  disposition. 

Congress,  pursuing  what  it  believed  to  be  its  duty 
under  the  opinion  of  reversal,  passed  the  act  approved 
June  9,  1916  (Chamberlain-Ferris  Act,  39  Stat.  218, 
ch.  137),  for  the  purpose  of  providing  for  the  disposition 
of  the  land  involved  in  the  action  "and  at  the  same 
time  secure[ing]  to  the  defendants  all  the  value  the 
granting  acts  conferred  upon  the  railroads"  (238  U.  S. 
439). 

Two  general  questions  are  presented  for  decision. 

First,  is  the  decree  of  the  lower  court  in  harmony 
with  the  mandate,  and, 

Second,  is  the  Chamberlain-Ferris  Act  a  proper 
exercise  of  power  by  Congress? 

ARGUMENT. 


THE  DECREE  OF  THE  LOWER  COURT  IS  IN  EXACT  HAR- 
MONY WITH  THE  MANDATE. 

A.  SECTION  1  IS  VALID. 

The  first  paragraph  of  the  decree  differs  from  the 
corresponding  paragraph  of  the  one  proposed  by  the 
defendants  only  in  the  use  of  the  italicized  word  "is," 
but  the  meaning  of  both  is  the  same. 


B.   SECTION  2  IS  VALID. 

(1)  AN  ACTUAL  SETTLER  IS   ONE   WHO   HAS   ESTABLISHED   AN  HABITA- 

TION  ON   THE   LAND   PURCHASED. 

In  paragraph  two  of  the  decree  the  italicized  words 
"on  the  lands  sold  him"  are  objected  to.  Clearly  the 
actual  settler  referred  to  in  the  restrictive  provisos  of 
the  granting  acts  (16  Stat.  47,  94)  declaring  that  the 
lands  shall  be  sold  only  "to  actual  settlers"  is  an 
actual  settler  on  the  identical  land  sold,  not  on  some 
other  lands.  Any  other  interpretation  is  utterly 
untenable.  The  trial  judge  said  that  "There  could 
be  no  actual  settler  until  an  actual  habitation  was 
established  upon  some  specific  parcel  of  this  land," 
and  this  court  approved  his  view.     (238  U.  S.  434.) 

(2)  THE  WORD  "LANDS"  HAS  THE  SAME  MEANING  IN  THE  RESTRICTIVE 
PROVISOS  AS  IT  HAS  IN  THE  GRANTING  CLAUSES  OF  THE  GRANT- 
ING ACTS. 

The  next  objection  to  the  same  paragraph  is 
predicated  upon  the  conception  that  the  word  "  land" 
or  "  lands,"  as  employed  in  the  granting  acts  (14 
Stat,  239;  16  Stat.  47;  16  Stat.  94)  and  the  opinion 
of  this  court  interpreting  them  (238  U.  S.  393)  does 
not  comprehend  within  its  meaning  timber  growing 
on  the  lands  or  minerals  therein.  In  other  words, 
that  the  provisos  in  the  granting  acts  forbidding  the 
sale  of  the  "lands"  except  "to  actual  settlers  only, 
in  quantities  not  greater  than  one-quarter  section  to 
one  purchaser,  and  for  a  price  not  exceeding  two 
dollars  and  fifty  cents  per  acre"  (16  Stat.  47),  apply 
to  the  surface  alone,  and  that  appellants  are  free  to 
sell  the  timber  and  mineral  apart  from  the  surface 


8 

for  any  price  they  choose  and  to  any  person  in  any 
quantity  they  may  select,  irrespective  of  whether 
the  purchaser  is  an  actual  settler  or  not. 

This  position  is  revealed  in  the  15th  assignment  of 
errors,  as  well  as  in  other  places,  where  it  is  stated, 
"the  court  erred  in  not  holding  *  *  *  that  the 
railroad  company  *  *  *  had  the  right  to  sell, 
cut,  remove,  or  authorize  the  cutting  or  removal  of 
the  timber  thereon,  and  the  court  erred  similarly  in 
not  so  holding  *  *  *  with  reference  to  any  min- 
eral or  other  deposits  in  or  products  out  of  said  lands" 
(Record  this  appeal,  p.  32).  The  same  contention 
is  given  much  importance  in  their  briefs. 

Is  it  correct1?  The  granting  clause  of  the  act  of 
1866  says,  "  That  there  be,  and  hereby  is,  granted  to 
the  said  companies  *  *  *  every  alternate  sec- 
tion of  public  land."  (Sec.  2.)  In  the  restrictive 
proviso  of  the  act  of  1869,  which  is  amendatory  of 
the  act  of  1866,  we  read,  "  that  the  lands  granted  by 
the  act  aforesaid  (meaning  the  act  of  1866)  shall  be 
sold  to  actual  settlers,"  etc.  Section  1  of  the  act  of 
1870  conveys  "each  alternate  section  of  the  public 
lands,"  while  in  section  4  it  is  said  "That  the  said 
alternate  sections  of  land  granted  by  this  act  [with 
some  exceptions  immaterial  here]  shall  be  sold  by 
the  company  only  to  actual  settlers."  (14  and  16 
Stat,  supra,  7.)     [Italics  ours.] 

Obviously  the  word  is  used  in  exactly  the  same 
sense  in  the  provisos  as  in  the  granting  clauses.  This 
being  so,  unless  it  is  broad  enough  in  the  former  to 
embrace  the  minerals  and  timber,  it  was  not  broad 
enough  in  the  latter  to  convey  to  appellants  title 


to  the  timber  or  minerals.  Consequently  they  must 
either  concede  that  the  word  " lands"  in  the  provisos 
embraces  the  timber  and  minerals  or  else  that  they 
have  no  title  to  them.  If  they  have  no  title,  they 
have  of  course  no  ground  for  complaint  as  to  the 
disposition  made  of  them  in  the  decree. 

Appellants'  position  as  we  apprehend  it  is  that  if  A 
is  granted  a  piece  of  land  under  the  condition  that  he 
shall  sell  it  at  a  price  not  to  exceed  $2.50  an  acre, 
he  can  separate  its  elements  into  three  parts,  the 
timber,  the  minerals,  and  the  surface,  and  sell  the 
timber  for  as  much  as  he  can  get,  the  minerals  for  as 
high  a  price  as  he  can  obtain,  and  the  surface  for  a 
price  not  to  exceed  $2.50  per  acre,  and  thus  comply 
with  his  contract.  In  other  words,  that  he  satisfies 
his  obligation  by  observing  the  restriction  as  to  one 
part  of  the  property  and  disregarding  as  to  two  other 
parts.     This  will  not  do.     {Infra  p.  40.) 

(3)  "LAND"  ORDINARILY  COMPREHENDS  NOT  ONLY  THE  SURFACE,  BUT 
ALSO    THE    TIMBER    GROWING    ON    IT    AND    MINERALS    BENEATH    IT. 

Washburn  says : 

Land  is  always  regarded  as  real  property, 
and,  ordinarily,  whatever  is  erected  or  growing 
upon  it,  as  well  as  whatever  is  contained  within 
it  or  beneath  its  surface,  such  as  minerals  and 
the  like,  upon  the  principle  that  cujus  est  solum, 
ejus  est  usque  ad  caelum  in  one  direction,  and 
usque  ad  Orcum  in  the  other  (vol.  1,  p.  3). 

In  Higgins  Oil  &  Fuel  Co.  et  al.  v.  Snow  et  al. 
(113  Fed.  433,  Circuit  Court  of  Appeals  for  the  Fifth 
Circuit)  it  was  contended  that  a  life  tenant  of  land 
was  not  entitled  to  any  interest  in  the  oil  produced 


10 

therefrom,  "her  estate  being  limited  to  the  surface." 
Answering  this,  the  court  said : 

The  life  estate  is  given,  not  in  surface  of  the 
land,  but  in  the  land  as  land,  and  it  is  elemen- 
tary that  the  land  itself  in  legal  contemplation 
extends  from  the  sky  to  the  depths  (p.  438). 

"Land"  includes  earth,  waters,  and  every  natural 
condition,  including  minerals  and  growing  trees. 
(Coke  Litt.  4a;  2  Bl.  Comm.  16-18;  Philadelphia 
Trust,  etc.  Co.  v.  Merchantville,  74  N.  J.  Eq.  330; 
State  v.  Jones,  143  la.  398;  Green  Bay  &  M.  Canal 
Co.  v.  Telulah  Paper  Co.,  140  Wis.  417;  Kinsley  v. 
Holbrook,  45  N.  H.  313.) 

The  restrictive  provisos  therefore  apply  with  equal 
force  to  the  timber  and  minerals  as  to  the  surface 
of  the  ground. 

(4)  TO  EXCLUDE  BY  CONSTRUCTION  THE  TIMBER  AND  MINERALS  FROM 
THE  OPERATION  OF  THE  RESTRICTIVE  CONDITIONS  WOULD  DEFEAT 
THE   LATTER. 

That  Congress  intended  the  lands  should  be  sold 
to  actual  settlers  only  in  quantities  not  to  exceed  160 
acres  to  one  person  and  for  a  price  not  exceeding 
$2.50  per  acre,  is  definitely  settled  by  the  decision 
of  this  court.  We  take  the  following  excerpts  from 
its  opinion: 

"The  sales  are  to  be  made  only  to  certain  persons 
and  not  exceeding  a  specified  maximum  in  quantities 
and  prices."  The  language  of  the  provisos  "certainly 
imposes  an  obligation  not  to  violate  the  limitations 
and  prohibitions  when  sales  were  made"  (238  U.  S. 
421).  "But  neither  the  provisos  nor  the  other  parts 
of  the  granting  acts  make  a  distinction  between  the 


11 

lands,  and  we  are  unable  to  do  so.  The  language  of 
the  grants  and  of  the  limitations  upon  them  is 
general.  We  can  not  attach  exceptions  to  it.  The 
evil  of  an  attempt  is  manifest.  The  grants  must  be 
taken  as  they  were  given.  Assent  to  them  was 
required  and  made,  and  we  can  not  import  a  different 
measure  of  the  requirement  and  the  assent  than 
the  language  of  the  act  expresses.  It  is  to  be  re- 
membered that  the  acts  are  laws  as  well  as  grants 
and  must  be  given  the  exactness  of  laws."  (Id.  422.) 
"We  agree  with  the  Government  that  the  company 
<*  *  *  might  sell  for  any  price  not  exceeding 
$2.50  an  acre.'"  (Id.  434.)  " Judgment  is  inde- 
pendent of  them.  It  is  determined  by  the  simple 
words  of  the  acts  of  Congress,  not  only  regarded  as 
grants  but  as  laws  and  accepted  as  both;  granting 
rights  but  imposing  obligations — rights  quite  definite, 
obligations  as  much  so."  (Id.  435.)  "We  can  only 
enforce  the  provisos  as  written,  not  relieve  from 
them."     (Id.  436.)     [Italics  ours.] 

Undoubtedly  the  provisions  just  quoted  make 
it  very  clear  that  according  to  this  court's  opinion 
the  maximum  amount  which  Congress  intended  the 
railroad  to  receive  out  of  the  grants  is  $2.50  per 
acre.  In  no  place  is  there  warrant  for  any  other 
conclusion.  "The  sales  are  to  be  made  *  *  * 
not  exceeding  a  specified  maximum  in  quantities 
and  prices,"  "we  can  not  attach  exceptions  to  it" 
(the  language  of  the  proviso),  the  company  can  sell 
for  any  price  "not  exceeding  $2.50  an  acre,"  embody 
thoughts    iterated    and    reiterated    throughout    thf> 

83047—17 3 


12 

opinion.  If,  however,  the  position  of  the  de- 
fendants that  the  timber  and  minerals  may  be 
sold  by  the  railroad  company  apart  from  the  lands 
and  without  any  regard  to  the  restrictive  provisos 
be  correct,  the  railroad  would  receive  a  great  deal 
more  than  $2.50  per  acre  as  the  following  discloses: 
The  record  on  the  former  hearing  shows  a  stipu- 
lation by  the  parties  that  the  value  of  the  2,300,000 
acres  involved  in  this  suit  "  exceeds  the  sum  of 
$30,000,000."  (Statement  case  for  Govt,  former 
hearing,  p.  83.)  That  number  of  acres  at  $2.50 
an  acre  would  amount  to  $5,750,000,  leaving  a 
balance  of  $24,250,000.  Assuming  that  this  balance 
represents  the  value  of  the  timber  and  minerals, 
and  it  is  not  far  from  it,  the  railroad  company  would 
receive  upon  their  theory  $24,250,000  in  addition 
to  $2.50  an  acre.  No  ingenuity  can  torture  from 
the  grants  as  construed  by  this  court  any  warrant 
for   a   result   so   extraordinary. 

(5)   ACCORDING   TO   THE   DECISION   OF   THIS   COURT   THE   TIMBER   AND 
MINERALS  ARE  A  PART   OF  THE  LANDS. 

In  the  opinion  this  court  said  : 

The  lands  invite  now  more  to  speculation 
than  to  settlement,  and  we  think,  therefore,  that 
the  railroad  company  should  not  only  be  enjoin- 
ed from  sales  in  violation  of  the  covenants,  but 
enjoined  from  any  disposition  of  them  what- 
ever or  of  the  timber  thereon  and  from  cutting 
or  authorizing  the  cutting  or  removal  of  any 
of  the  timber  thereon,  etc.  (238  U.  S.,  438). 
[Italics  ours.] 


13 

This  means  that  the  timber  is  subject  to  the  re- 
strictive provisos.  If  not,  why  forbid  its  disposi- 
tion? There  is  no  authority  for  doing  so  unless  the 
provisos  are  applicable.  Yet  the  word  " timber" 
does  not  occur  in  either  of  them.  The  prohibition, 
then,  must  rest  on  the  theory  that  the  term  "land" 
is  to  be  taken  in  its  usual  sense,  and  since  the  re- 
strictions relate  to  it,  they  must  of  necessity  bear 
on  all  its  component  parts,  including  timber  and  min- 
erals. 

A  similar  view  of  this  court's  opinion  was  taken  by 
the  United  States  Circuit  Court  of  Appeals  for  the 
Ninth  Circuit  in  Southern  Oregon  Company  v.  United 
States,  decided  February  13,  1917,  but  not  yet  pub- 
lished. That  case  involved  the  construction  of  a 
grant  made  March  3,  1869  (15  Stat.  340)  to  the  State 
of  Oregon  which  provided  among  other  things  that 
the  lands  "shall  be  sold  to  any  one  person  only  in 
quantities  not  greater  than  one  quarter  section  and 
for  a  price  not  exceeding  $2.50  per  acre."  The  grant 
was  subsequently  conveyed  to  the  Coos  Bay  Wagon 
Road  Company  subject  to  all  the  conditions  embodied 
in  the  granting  act.  This  was  in  accordance  with 
section  2  of  the  act.  The  Wagon  Road  Company 
disposed  of  the  land  in  violation  of  the  restrictive 
proviso,  the  title  passing  through  many  grantees  until 
it  found  lodgment  in  the  appellant,  Southern  Oregon 
Company.  Suit  was  brought  by  the  Government 
asking  for  similar  relief  to  that  for  which  it  prayed  in 
this  case.     The  decree  of  the  lower  court  was,  so  far 


14 

as  applicable,  in  substantially  the  same  terms  as  the 
decree  in  this  case.  The  court  of  appeals,  consisting 
of  Gilbert,  Ross,  and  Hunt,  circuit  judges,  filed  two 
opinions,  one  by  Judge  Gilbert  and  a  concurring 
opinion  by  Judges  Ross  and  Hunt.  Both  opinions 
are  based  upon  the  decision  of  this  court  in  the  case 
at  bar,  and  unite  in  affirming  the  decree  of  the  lower 
court.  In  the  concurring  opinion  it  is  recited  that 
the  lower  court  refused  a  decree  of  forfeiture  of  the 
land — 

but  enjoined  the  defendant,  its  officers  and 
agents,  from  selling  or  making  any  disposition 
thereof,  or  of  the  timber,  materials,  or  other 
deposits  thereon  or  therein  "until  Congress 
shall  have  a  reasonable  opportunity  to  make 
provision  by  legislation  for  the  disposition  of 
said  lands,  timber,  mineral,  or  other  deposits 
in  accordance  with  such  policy  as  Congress 
may  deem  fitting  under  the  circumstances, 
and  at  the  same  time  secure  to  the  defendant 
all  the  value  that  the  granting  act  conferred 
upon  the  state  of  Oregon  or  the  Wagon  Road 
Company,"  with  a  provision  to  the  effect  that 
should  Congress  fail  to  act  in  the  premises 
within  a  stated  period  the  defendant  might 
apply  to  the  court  for  a  modification  of  the 
decree,  the  court  reserving  jurisdiction  for 
that  purpose.  The  main  basis  of  the  court's 
ruling,  as  appears  from  its  opinion,  was  the 
decision  of  the  Supreme  Court  in  the  case  of 
Oregon  &  California  R.  R.  v.  United  States, 
238  U.  S.  393.  A  careful  examination  of  the 
opinion  in  that  case  satisfied  us  that  its  doc- 
trine, applied  to  the  facts  of  the  present  case, 


15 

authorized  and  required  the  decree  that  was 
entered  by  the  court  below,  which  was  per- 
missible under  the  prayer  for  general  relief. 
(Italics  ours.) 

(6)  THIS  COURT  HAVING  DECIDED  THAT  THE  RESTRICTIVE  PROVISOS 
RELATE  TO  THE  TIMBER  AND  MINERALS  AS  WELL  AS  THE  SURFACE, 
THE   QUESTION  IS   RES   JUDICATA. 

Assuming,  without  conceding,  that  the  applicability 
of  the  covenants  to  the  timber  and  minerals  was  not 
presented  by  defendants  on  the  former  hearing,  may 
they  do  so  now? 

In  Nesbit  v.  Riverside  Independent  District,  144  U.  S. 
610,  it  was  said  that  (618) : 

When  the  second  suit  is  upon  the  same  cause 
of  action,  and  between  the  same  parties  as  the 
first,  the  judgment  in  the  former  is  conclusive 
in  the  latter  as  to  every  question  which  was  or 
might  have  been  presented  and  determined  in 
the  first  action. 

In  Dowell  v.  Applegate,  152  U.  S.  327,  speaking  of 
the  effect  of  a  former  decree,  it  was  said  (343) : 

And  that  decree,  never  having  been  modified 
by  the  court  that  rendered  it  nor  by  this  court 
upon  appeal,  necessarily  concludes  every  matter 
that  Daniel  W.  Applegate  was  entitled,  under 
the  pleadings,  to  bring  forward  in  order  to  pre- 
vent the  sale  of  the  lands  claimed  by  him,  by 
whatever  title. 

In  Northern  Pacific  R.  Co.  v.  Slaght,  205  U.  S.  122, 
130-131,  we  read: 

The  general  rule  of  the  extent  of  the  bar  is 
not  only  what  was  pleaded  or  litigated,  but 
what  could  have  been  pleaded  or  litigated 
(Italics  in  each  case  ours.) 


16 

(To  the  same  effect  are  Cromwell  v.  County  of  Sac,  4 
Otto  351,  and  Virginia- Carolina  Chemical  Co.  v. 
Kirven,  215  U.  S.  252.) 

The  case  when  here  before  turned  chiefly  on  the 
meaning  of  the  restrictive  covenants.  Union  Trust 
Company  sought  to  limit  them  "to  lands  susceptible 
of  cultivation,"  and  to  exclude  from  their  scope 
"timberlands"  (its  brief,  p.  103);  while  the  rail- 
road company  and  Gage  urged  that  because  (as  they 
alleged)  the  lands  were  unfit  for  settlement  the  cove- 
nants did  not  apply  (their  brief  point  21,  p.  IV). 
There  were,  of  course,  other  contentions  touching  the 
same  subject.  But  the  foregoing  is  sufficient  to 
illustrate  the  point  we  make,  which  is  that  since  the 
scope  of  the  covenants  was  properly  under  discussion 
at  that  time,  if  defendants  failed  to  advance  all  that 
might  have  been  said  on  the  subject,  they  can  not 
supplement  their  argument  now.  The  matter  is 
irrevocably  decided.  {In  re  Sanford  Fork  &  Tool  Co., 
160  U.  S.  247,  255.) 

C.  SECTION  3  IS  VALID. 

The  objection  to  this  section,  so  far  as  it  forbids 
the  removal  of  mineral,  is  unsound  for  the  same 
reason,  as  a  like  objection  to  a  similar  prohibition  in 
section  two,  just  considered. 

The  only  difference  between  the  section  proposed 
by  defendants  and  this  section,  except  some  imma- 
terial verbal  ones,  consists  of  the  circumstance  that, 
in  addition  to  restraining  the  disposition  of  the  lands, 
it  forbids  the  withdrawal  of  certain  moneys  on  deposit 


17 

in  Portland  banks.  This  money  was  derived  from 
the  land  after  the  first  decree  had  been  entered,  and 
by  direction  of  the  trial  court  was  placed  on  deposit 
to  await  the  final  outcome  of  the  suit.  A  large  part 
of  it  represents  the  proceeds  of  a  sale  of  timber 
ordered  by  the  court  and  takes  the  place  of  the 
timber.  It  is  subject,  we  say,  to  the  same  disposi- 
tion by  Congress  as  the  timber  would  be  if  the  latter 
had  not  been  removed. 

D.   SECTION  4  IS  VALID. 

The  last  11  lines  of  section  3  of  the  decree  pro- 
posed by  the  defendants  does  not  differ  materially 
from  section  4  of  the  decree  entered  by  the  court, 
save  that  the  latter  recognizes  the  right  of  Con- 
gress to  dispose  of  the  money,  timber,  minerals, 
or  other  deposits,  and  reserves  to  the  court  the 
right  to  modify  for  good  cause  the  temporary  in- 
junction granted.  We  have  sufficiently  discussed 
the  power  of  the  court  to  restrain  the  disposition 
of  the  timber  and  minerals  as  well  as  the  other  part 
of  the  lands.  The  part  reserving  to  the  court  the 
power  to  modify  the  temporary  injunction  for 
good  cause  is  in  clear  accord  with  the  opinion, 
but  what  was  proposed  by  the  defendants  is 
not.  The  opinion  says:  "And  the  court  in  its  dis- 
cretion may  modify  the  decree  accordingly."  (238 
U.  S.,  439.)  The  decree  provides:  "The  court 
reserves  the  right  to  modify  the  decree  if  in  its 
opinion  good  cause  shall  then  exist  for  doing  so." 
There  is  no  substantial  difference  between  the 
opinion  and  the  decree. 


18 

E.    SECTION  5  IS  VALID. 

Clearly  the  purpose  of  the  opinion  was  to  au- 
thorize and  require  the  application  of  both  the  per- 
manent and  temporary  injunctions  provided  for  to 
all  the  unsold  lands.  It  says  the  defendants  shall 
"be  enjoined  from  sales  in  violation  of  the  cove- 
nants" (238  U.  $.,  438).  No  warrant  anywhere 
for  the  thought  that  the  railroad  company  could  in 
the  future  legally  violate  the  covenants  with  respect 
to  any  of  the  grant  lands  whether  they  were  in- 
cluded in  the  suit  or  not.  The  relief  sought  and 
granted  are  permanent  as  to  all  such  land. 

The  only  part  of  the  grants  excluded  from  the 
suit  was  that  which  the  railroad  company  had  sold 
(238  U.  S.,  pp.  436-437),  and  all  lands  covered  by 
executory  contracts  of  sale  were  treated  as  sold. 
(Statement,  case  for  Govt.,  former  hearing,  p.  28.) 
It  was  the  purpose  of  the  bill  to  reach  all  lands  in 
which  third  parties  had  or  claimed  no  interest  by 
way  of  contract  with  the  railroad  company.  The 
bill  was  so  construed  by  the  lower  court  and  all  the 
parties,  for  the  first  decree  includes,  as  this  one 
does,  all  lands  which  had  reverted  at  the  date  of  the 
decree  or  which  might  thereafter  revert  to  the  com- 
pany. (Old  Record  VIII,  p.  1301,  sec.  3,  sub.  d.) 
To  this  no  objection  was  made  in  any  of  the  briefs 
or  oral  arguments.  Even  if  reverted  lands  are  not 
covered,  no  prejudice  can  result  to  defendants,  be- 
cause the  judgment  in  this  suit  as  to  the  meaning 
of  the  covenants  would  be  binding  on  them  in  any 
suit  hereafter  brought  by  the  Government  to  affect 


19 

those  lands.  The  subject  and  the  parties  would  be 
the  same,  and  defendants  would  not  be  heard  to  say 
in  such  a  suit  that  this  judgment  is  wrong  in  any 
respect.  (Cromwell  v.  Sac  County,  supra;  Nesbit  v. 
Riverside  Independent  District,  supra;  Dowell  v.  Ap- 
plegate,  supra;  Northern  Pacific  R.Co.v.  Slaght,  supra; 
Virginia- Carolina  Chemical  Co.  v.  Kirven,  supra.) 

F.  SECTION  6  IS  VALID. 

This  provision  is  authorized  by  that  part  of  the 
opinion  which  says,  in  effect,  that  the  decree  shall 
be  without  prejudice  to  any  other  suits  which  the 
Government  may  have  with  respect  to  the  granted 
lands  (Id.,  437). 

G.  WHY  THE  LOWER  COURT  DEEMED  IT  NECESSARY  TO  SPE- 
CIFICALLY MENTION  TIMBER  AND  MINERALS  AND  TO 
PROHIBIT  THEIR  DISPOSITION  EXCEPT  AS  A  PART  OF  AND 
IN  CONJUNCTION  WITH  THE  AREA  CONTAINING  THEM. 

The  railroad  companies  and  Gage,  after  the  opinion 
had  been  handed  down,  but  before  the  decree  of  the 
lower  court  was  entered,  served  upon  the  Government 
a  paper  entitled  a  "  Petition  *  *  *  for  modifica- 
tion of  opinion  rendered."  In  this  they  argued  that 
under  the  grants  they  were  "  authorized  to  remove 
stone  from  the  lands  and  use  it  to  build  a  railroad 
bridge  or  a  station  house,  or  *  *  *  farm  a  patch 
of  arable  area  and  turn  the  farm  products  into  money  " 
and  then  said: 

If  all  this  be  true  there  is  no  reason  apparent 
to  us  upon  the  face  and  terms  of  the  statute 
why  the  right  of  the  grantee  in  a  like  way  to 

83047—17 — -4 


20 

make  use  of  the  timber  upon  the  lands  should 
be  differentiated  (p.  8) : 

Again : 

But  the  removal  of  the  timber  upon  this  land 
would  not  go  in  defeat  of  the  settlement  policy 
of  the  act,  but  would  be  directly  in  aid  of  such 
policy  (p.  9). 

The  Government  believed  that  the  defendants, 
holding  these  views,  might  attempt  to  remove  the 
timber  from  the  lands  without  regard  to  the  restric- 
tive clauses  even  after  Congress  had  acted.  If  they 
did,  the  Government  undoubtedly  would  feel  con- 
strained to  commence  proceedings  to  enjoin  them. 
To  save  the  necessity  of  this,  as  well  as  the  costs  and 
delays  attendant  upon  it,  the  Government  asked  the 
lower  court  to  make  the  decree  so  specific  that  there 
could  be  no  doubt  in  the  minds  of  the  defendants  or 
anybody  else  concerning  its  meaning. 

H.  WHEN  THE  TRIAL  COURT  ASSESSED  COSTS  AGAINST  THE 
DEFENDANTS  IT  WAS  ACTING  WITHIN  ITS  POWER  UNDER 
THE  MANDATE. 

The  mandate  directs  a  general  reversal  of  the  lower 
court's  decree.  This  put  the  case  where  it  was  be- 
fore the  decree  had  been  entered.  Thereupon  the 
lower  court,  in  obedience  to  the  mandate,  entered  a 
new  decree  in  favor  of  the  complainant  and  against 
the  defendants  upon  the  record  as  it  had  been  made. 

Suppose  the  trial  court  in  the  first  instance,  instead 
of  entering  a  decree  declaring  a  forfeiture,  had  entered 
such  a  decree  as  the  mandate  required,  would  there 
be  any  doubt  about  the  complainant's  right  to  costs'? 


21 

Surely  not.  It  had  prevailed,  and  the  prevailing 
party  is  always  entitled  to  recover  his  costs  unless 
there  be  some  special  reason  appealing  to  the  sound 
discretion  of  the  court  for  not  allowing  them. 

In  Tyler  Min.  Co.  v.  Sweeney,  79  Fed.  277,  the 
court  said  (281) : 

In  equity  cases  and  in  other  cases  where 
there  are  no  statutory  provisions  or  rules  of 
practice,  the  award  of  costs,  as  well  as  the 
taxation  thereof,  rests  in  the  sound  discretion 
of  the  trial  court,  and  will  not  be  reviewed 
in  the  appellate  court,  except  in  cases  of  a 
manifest  abuse  of  such  discretion. 

This  discretion,  of  course,  is  judicial,  not  arbitrary. 
Is  there  any  reason  in  this  case  why  the  appellants 
should  not  be  compelled  to  pay  the  complainant  its 
costs?  The  illegal  action  of  the  defendants  forced 
the  complainant  to  go  into  court  for  relief.  It  plead 
the  granting  acts — the  law — and  showed  that  they 
had  been  violated  by  the  defendants.  This  the  latter 
denied.  In  consequence  of  the  denial  much  testi- 
mony was  taken.  The  court  found  that  the  granting 
acts  had  been  violated,  that  the  railroad  company 
was  guilty  of  a  "  prolonged  disregard  of  the  cov- 
enants." Where,  then,  is  there  any  equitable  cause 
for  relieving  the  lawbreaker  from  the  consequence  of 
its  acts? 

Appellants  place  themselves  on  the  proposition 
that  this  court  did  not  order  them  to  pay  costs. 
Neither  did  it  make  any  order  with  respect  to  them. 
Yet  it  was  necessary  for  the  lower  court  to  pass  some 


22 

order  relative  to  the  payment  of  the  costs.  A  vast 
amount  of  testimony  had  been  taken  before  a 
stenographer — examiner — appointed  by  the  court. 
His  fees  had  to  be  paid.  Equity  rule  50  provides 
that  such  fees  shall  be  taxed  "ultimately  as  costs;" 
but  to  which  party  ?  That  of  course  is  for  the  court. 
Without  some  order  with  respect  to  the  costs  the 
record  would  be  incomplete.  Therefore  we  say  that 
when  this  court  directed  the  lower  court  to  enter  a 
decree  in  accordance  with  the  opinion  it  impliedly 
directed  that  the  court  award  costs  in  accordance 
with  the  usual  rules  of  equity.  Hence  the  court  was 
within  its  rights  in  directing  that  the  losing  parties 
should  pay  the  costs. 

Were  the  defendants  the  losing  parties'?  It  is 
true  the  Government  was  defeated  in  its  conten- 
tion that  the  restrictive  provisos  constituted  con- 
ditions subsequent,  but  so  were  the  defendants 
defeated  in  their  position  that  these  provisos 
were  only  " unenforceable  covenants"  (238  U.  S., 
412).  That  the  Government  was  successful  in  the 
main  is  made  evident  by  these  facts:  The  value 
of  the  land  "exceeds  thirty  millions,"  according 
to  our  stipulation.  The  Government  claimed  alL 
So  did  the  railroad  companies.  By  the  judgment 
of  the  court  the  railroad  is  entitled  to  a  maximum 
of  $2.50  per  acre  only,  or  $5,750,000  for  the  2,300,- 
000  acres  involved.  Deduct  this  sum  from  the 
total  value  of  thirty  millions  and  there  results 
a  remainder  of  $24,250,000  which,  by  the  judg- 
ment of  the  court,  goes  to  the  Government.     To 


23 

that  extent  the  Government  was  successful,  and 
hence,  as  we  have  just  observed,  is  entitled  to  its 
costs. 

II. 

THE  CHAMBERLAIN-FERRIS  ACT  IS  A  PROPER  EXERCISE 
OF  POWER  BY  CONGRESS. 

A.   CONGRESS  HAD  POWER  TO  REVEST  THE  TITLE. 

In  the  opinion  and  mandate  the  court  directed 
that  the  defendants  be — 

enjoined  from  any  disposition  of  them  (the 
lands)  whatever  or  of  the  timber  thereon 
and  from  cutting  or  authorizing  the  cutting 
or  removal  of  any  of  the  timber  thereon, 
until  Congress  shall  have  a  reasonable  oppor- 
tunity to  provide  by  legislation  for  their  dis- 
position in  accordance  with  such  policy  as  it 
may  deem  fitting  under  the  circumstances 
and  at  the  same  time  secure  to  the  defendants 
all  the  value  the  granting  acts  conferred 
upon  the  railroads."  (238  U.  S.  supra,  438- 
439.)     [Italics  ours.] 

Congress  understood  this  to  mean  that  in  the 
judgment  of  the  court  it  had  power  to  dispose  of 
the  lands  in  question  in  any  way  that  it  might  see 
fit,  subject  only  to  the  one  condition,  namely,  that 
it  secure  to  the  defendants  "all  the  value  that  the 
granting  acts  conferred  upon  the  railroads." 

To  be  sure,  the  court  did  not  say  specifically  that 
Congress  had  power  to  make  disposition  of  the  lands, 
but  this  is  necessarily  implied  in  what  it  did  say. 
The  court's  action  is  open  to  no  other  meaning. 
Surely  the  court  did  not  refer  to  Congress  the  disposi- 


24 

Hon  of  the  lands  without  holding  at  the  same  time 

that  Congress  had  the  power  to  make  the  disposition. 
Webster's  Dictionary  says  that  "to  dispose  of" 

means  "to  part  with;  to  relinquish;  to  get  rid  of;  as, 

to  dispose  of  a  house." 

In  Phelps  v.  Harris,  101  U.  S.  370,  380-381,  we 

read: 

The  expression  "to  dispose  of"  is  very 
broad,  and  signifies  more  than  "to  sell."  Sell- 
ing is  but  one  mode  of  disposing  of  property. 
*  *  *  Taking  the  words  in  their  ordinary 
sense,  a  general  power  to  dispose  of  land  or 
real  estate  and  to  take  in  return  therefor  such 
proceeds  as  one  thinks  best  will  include  the 
power  of  disposing  of  them  in  exchange  for 
other  lands.  It  would  be  a  disposal  of  the 
lands  parted  with,  and  the  lands  received 
would  be  the  proceeds. 

(See  also  Hill  v.  Sumner,  132  U.  S.  118;  United 
States  v.  Gratiot,  14  Pet.  526;  King  v.  Ackerman,  2 
Black  408;  Woodbridge  v.  Jones,  103  Mass.  549;  Beard 
v.  Knox,  5  Cal.  252;  Williams,  lessee,  v.  Veatch,  17 
Ohio  171;  Pearre  &  Co.  v.  Hawkins,  62  Tex.  434.) 

The  power  to  dispose  of  the  lands  implies  the 
power  to  do  all  things  necessary  to  the  full  exercise 
of  that  power.  (McCulloch  v.  Maryland,  4  Wheat. 
315,  409.)     This  is  axiomatic. 

Therefore,  Congress  must  have  had  the  power  to 
revest  title  in  the  Government,  for  without  the  title 
the  Government  could  not  make  "disposition"  of 
the  lands. 


25 

An  additional  reason  for  this  is  found  in  the  fact 
that  what  is  to  be  secured  to  the  railroad  company 
under  the  opinion  is  the  "value" — not  the  rights — 
conferred  by  the  grants.  In  other  words,  Congress 
had  authority  according  to  the  opinion  to  take  the 
rights  and  pay  their  "value."  Congress  so  inter- 
preted the  court's  opinion,  and  in  consequence  passed 
the  Ferris  Act. 

It  is  not,  of  course,  for  us  to  attempt  to  defend  the 
decision  of  this  court  to  the  effect  that  Congress  had 
power  to  revest  the  title.  To  do  so  would  be  an  im- 
pertinence. Besides,  it  needs  no  defense.  It  is  the 
law  of  the  case  and  binding  irrevocably  upon  all — the 
Government  and  appellants  alike. 

1.  POWER  RESERVED  IN  THE  ACT  OF  1866. 

But  if  defense  were  necessary  it  is  at  hand.  The 
act  of  1866  reserved  to  Congress  the  power  to  amend 
it  at  any  time  "having  due  regard  for  the  rights"  of 
the  railroad  companies.     (Sec.  12.) 

This  is  sufficient  authority  for  the  passage  of  the 
Chamberlain-Ferris  Act  so  far  as  it  affects  the  lands 
granted  by  the  act  of  1866,  and  most  of  those  here 
involved — all  but  53,000  of  the  2,300,000  acres— were 
granted  by  that  act.  Congress  had  that  power  in 
mind  when  it  passed  the  Chamberlain-Ferris  Act. 
(Preamble  to  act,  39  Stat.,  par.  4,  p.  218.) 

Appellants  take  issue  with  this  proposition  and  say 
that  the  power  reserved  was  not  broad  enough  to 
warrant  a  revestment  of  the  title.  In  support  of  this 
position    several    authorities  are   brought   forward; 


26 

none  of  them  sustain  it.  Take,  for  instance,  the 
opinion  in  the  Sinking  Fund  Cases  (99  U.  S.  700). 
The  court,  speaking  of  such  a  reservation  as  we  have 
here,  said  (720) : 

Congress  not  only  retains,  but  has  given 
special  notice  of  its  intention  to  retain,  full  and 
complete  power  to  make  such  alterations  and 
amendments  of  the  charter  as  come  within 
the  just  scope  of  legislative  power. 

And  quotes  with  approval  from  other  decisions  of  this 
court  the  following : 

It  may  safely  be  affirmed  that  the  reserved 
power  may  be  exercised,  and  to  almost  any 
extent,  to  carry  into  effect  the  original  pur- 
poses of  the  grant;  or  to  secure  the  due 
administration  of  its  affairs,  so  as  to  protect  the 
rights  of  stockholders  and  of  creditors,  and 
for  the  proper  disposition  of  its  assets. 

Again,  the  power  to  amend  may  be  exercised    to 

protect  the  rights  of  the  public  and  of  the 
corporators,  or  to  promote  the  due  adminis- 
tration of  the  affairs  of  the  corporation. 

But  (721) 

the  alterations  must  be  reasonable ;  they  must 
be  made  in  good  faith,  and  be  consistent  with 
the  object  and  scope  of  the  act  of  incorpora- 
tion. Sheer  oppression  and  wrong  can  not  be 
inflicted  under  the  guise  of  amendment  or 
alteration.     (Italics  ours.) 

The  power  has  been  used  in  this  case  "to  carry 
into  effect  the  original  purposes  of  the  grant"  and 
"to  protect  the  rights  of  the  public." 


27 

There  is  nothing  to  the  contrary  in  the  other 
cases  cited  by  appellants.  Therefore,  we  pass  them 
without  further  notice. 

2.  POWER  OF  EMINENT  DOMAIN. 

The  Chamberlain-Ferris  Act  may  also  be  justified  as 
a  legitimate  exercise  of  the  power  of  eminent  domain 
(Lr.  S.  v.  Jones,  109  U.  S.,  513,  518).  In  taking  the 
lands  Congress  was  bent  upon  serving  one  of  the  public 
purposes  for  which  the  grants  were  made,  namely, 
the  settlement  of  the  country  (238  U.  S.  417).  The 
railroad  company  had  unlawfully  refused  for  almost 
40  years  to  advance  that  purpose,  and  in  consequence 
Congress  recalled  the  title  to  the  end  that  it  might 
achieve  what  the  railroad  company  had  refused  to  do. 

In  addition,  the  proceeds  of  the  sales  of  the  lands 
are  to  go  to  purposes  undoubtedly  public — 25  per 
cent  for  irreducible  school  fund;  25  per  cent  for  com- 
mon schools,  roads,  highways,  bridges,  and  post  dis- 
tricts; 40  per  cent  for  reclamation  purposes,  and  10 
per  cent  for  general  fund  of  the  Treasury  (Chamber- 
lain-Ferris Act,  39  Stat.,  sec.  10,  p.  222). 

This  court  has  decided  (United  States  v.  Gettysburg 
Electric  Railway,  160  U.  S.  668)  that  (681)— 

When  the  legislature  has  declared  the  use  or 
purpose  to  be  a  public  one,  its  judgment  will 
be  respected  by  the  courts,  unless  the  use  be 
palpably  without  reasonable  foundation. 

There  was  no  formal  declaration  here  that  the  pur- 
pose was  public,  but  that,  we  apprehend,  is  not  nec- 
essary when  its  character  is  evident,  as  in  this  case. 


28 

The  value  of  the  land  to  the  railroad  company 
under  the  granting  acts  was  appraised  by  this  court 
when  the  case  was  here  before — an  action  to  which 
appellants  were  parties — and  compensation  accord- 
ing to  the  value  thus  fixed  is  secured  by  the  Chamber- 
lain-Ferris Act.  No  more  is  needed.  (Sweet  v.  Rechel, 
159U.S.  380,401;  Cherokee  Nation  v.  Kansas  Railway 
Co.,  135  U.  S.  641,  658.) 

3.  EQUITY  ALWAYS  HAS  POWER  TO  GRANT  ADEQUATE  RELIEF. 

But  apart  from  and  entirely  independent  of  this, 
the  Chamberlain-Ferris  Act  is  sustainable  upon  the 
ground  that  it  is  a  part  of  the  remedy  given  to  the 
Government  by  the  judgment  of  this  court.  It  is 
rudimentary  law  that  a  court  of  equity  always  has 
the  right  to  create  any  remedy  it  may  think  necessary 
for  the  purpose  of  affording  proper  relief  in  any  case. 

The  case  of  Sharon  v.  Tucker,  144  U.  S.  533,  quotes 
with  approval  the  following  (544-545) : 

It  is  absolutely  impossible  to  enumerate  all 
the  special  kinds  of  relief  which  may  be 
granted  or  to  place  any  bounds  to  the 
power  of  the  courts  in  shaping  the  relief  in 
accordance  with  the  circumstances  of  partic- 
ular cases.  As  the  nature  and  incidents  of 
proprietary  rights  and  interests  and  of  the 
circumstances  attending  them,  and  of  the 
relations  arising  from  them,  are  practically 
unlimited,  so  are  the  kinds  and  forms  of 
specific  relief  applicable  to  these  circumstances 
and  relations.     (1  Pom.  Eq.  Jur.,  sec.  170.) 

Bispham  observes  that : 

This  capacity  of  moulding  a  decree  to  suit 
the  exact  exigencies  of  a  particular  case  is 


29 

indeed  one  of  the  most  striking  advantages 
which  procedure  in  chancery  enjoys  over  that 
at  common  law.  (Bispham's  Principles  of 
Equity,  sec.  7.) 

In  Brewster  v.  Lanyon  Zinc  Co.,  140  Fed.  801, 
Judge  Van  Devanter,  speaking  for  the  eighth  circuit, 
quoted  the  following  with  approval  (818) : 

The  flexibility  of  decrees  of  a  court  of 
equity  will  enable  it  to  meet  ever)^  emergency. 

(See  also  Payne  v.  Hook,  7  Wall.  425,  432,  and 
Missouri,  K.  &  T.  Trust  Co.  v.  Krumseig,  172  U.  S. 
351,  361.) 

In  Sage  v.  Central  Railroad  Co.,  9  Otto  334,  it  was 
said  (342): 

The  specific  relief  sought  was  a  strict  fore- 
closure; but  under  the  prayer  for  general 
relief  it  is  not  questioned  that  the  decree  for 
a  sale  was  appropriate. 

One  of  the  prayers  of  the  bill  in  the  case  at  bar  was 
for  general  relief.  There  was  also  a  prayer  for  the 
sale  of  the  lands.  (Statement  case  for  Govt.,  former 
hearing,  p.  34-35.) 

The  adaptability  of  decrees  in  equit}^  to  the  par- 
ticular facts  of  a  case  is  touched  upon  in  the  opinion 
herein  (238  U.  S.  422). 

The  railroad  company  had  violated  with  impunity 
its  contracts — the  grants — with  the  Government. 
From  the  very  beginning  it  paid  no  attention  to  the 
restrictive  provisos  thereof.  (Statement  case  for 
Govt.,  former  hearing,  p.  88.)     The  court  found  that 


30 

it  had  been  guilty  of  "  prolonged  disregard  of  the  cov- 
enants" (238  U.  S.  438)  and  that  an  injunction  against 
violations  of  them  in  the  future  would  not  be  enough. 
What  then?  Having  power  to  fit  the  relief  to  the 
situation,  did  it  not  have  power  to  refer  the  disposition 
of  the  lands  to  Congress,  with  the  admonition  that  if 
the  latter  made  disposition  of  them  it  must  secure  to 
the  defendants  "all  the  value  the  granting  acts  con- 
ferred upon  the  railroads." 

It  seems  to  be  the  argument  of  the  appellants  that 
although  the  railroad  company  was  guilty  of  a  "  pro- 
longed disregard  of  the  covenants,"  and  that  re- 
straint from  future  violations  would  not  be  enough 
(238U.  S.  438),  still  there  was  no  power  anywhere  to 
do  more  than  restrain  the  company  from  such  viola- 
tions; that  neither  the  title  nor  the  possession  of  the 
company  could  be  disturbed ;  that  if  it  was  good  in  the 
future,  its  past  delinquencies  with  all  their  baneful 
consequences  must  be  forgotten,  or  at  least  that  there 
was  no  power  in  the  courts  to  grant  the  Government 
any  other  relief.  Why  should  this  be  so?  Are  not 
other  corporations  amenable  to  the  law  for  their 
breaches  of  contract?  Then,  why  not  this  one? 
"Upon  what  meat  doth  this"  corporation  feed  that  it 
"has  grown  so  great"  as  to  be  free  from  the  conse- 
quences of  its  illegal  conduct?  Is  the  court  impotent 
to  grant  any  relief  except  that  which  harmonizes  with 
the  company's  will?  May  it  not  coerce  the  company 
into  law  obedience  by  any  means  which  it  adjudges 
proper? 

The  contract  breached  in  this  case  is  different 
from  those  which  appear  in  most  other  cases,  be- 


31 

cause  it  is  not  only  a  contract,  but  also  a  law.  (238 
U.  S.  432.)  Adequate  relief,  in  the  judgment  of  the 
court,  required  a  change  in  that  law.  For  instance,  it 
would  not  do  to  sell  160  acres  at  $2.50  an  acre — 
$400 — which  are  worth,  because  of  the  timber  on 
them,  $18,000.  To  do  this,  said  the  court,  would  in- 
vite "more  to  speculation  than  to  settlement"  (238 
U.  S.  438),  but  none  the  less  it  would  have  to  be  done 
unless  the  law  could  be  altered.  Consequently  the 
matter  was  referred  to  Congress,  the  only  body  having 
power  to  make  the  change,  and  through  whose  assist- 
ance alone  the  secondary  and  only  remaining  purpose 
of  the  grants — settlement — could  be  carried  out  at  this 
time.  If  this  puts  the  appellants  in  a  situation  they 
do  not  like,  it  is  because  the  railroad  company  failed 
to  keep  its  contract  and  obey  the  law. 

But,  however  all  that  may  be,  the  decision  of  this 
court,  as  we  have  heretofore  observed,  that  Congress 
had  the  power  to  dispose  of  the  lands  and  hence  to 
revest  the  title  in  the  Government,  is  not  open  for 
examination  here— it  is  conclusive. 

B.  APPELLANTS    HAVE    NO    CAUSE    FOB,    COMPLAINT   AGAINST 

THE  ACT. 

For  nearly  forty  years  prior  to  the  commencement 
of  this  action,  the  railroad  company  had  ignored  its 
contracts  with  the  Government  (238  U.  S.  pp.  425, 
438).  It  is  not  in  a  position  to  insist  that  those 
contracts  shall  not  now  be  disturbed  even  though  its 
violation  of  them  renders  their  disturbance  necessary 
in  order  that  the  rights  of  the   other  contracting 


32 

party — the  Government — be  protected.  Especially 
is  this  so  since  all  the  railroad  company's  interest 
under  the  contracts — the  grants* — as  found  by  this 
court,  are  adequately  preserved  in  the  Chamberlain- 
Ferris  Act,  as  we  shall  presently  show. 

C.  THE  CHAMBERLAIN-FERRIS  ACT  SECURES  TO  THE  APPEL- 
LANTS "ALL  THE  VALUE"  CONFERRED  BY  THE  GRANTING 
ACTS  UPON  THE  RAILROADS. 

It  consists  of  a  preamble  and  12  sections.  In 
the  former,  reference  is  made  to  the  Granting  Acts; 
the  restrictive  covenants  and  the  violations  of  them; 
the  decision  of  this  court  referring  the  disposition  of 
the  lands  to  Congress;  the  power  of  amendment 
reserved  in  the  granting  act  of  1866  (sec.  12);  the 
receipt  by  the  railroad  of  large  sums  of  money  from 
sales  of  the  land,  leases,  interest,  contracts,  etc.,  in 
excess  of  $2.50  per  acre;  and  the  terms  of  the  grants 
fixing  the  maximum  price  at  $2.50  per  acre.  Only 
sections  1,  7,  8,  9,  and  part  of  10  relate  to  the  interest 
of  the  railroad  company.  The  others  deal  with  the 
handling  of  the  lands  after  the  title  thereto  has  been 
revested  in  the  Government,  and  are  immaterial  here. 

The  first-mentioned  sections  read : 

Be  it  enacted  by  the  Senate  and  House  of 
Representatives  of  the  United  States  of  America 
in  Congress  assembled,  That  the  title  to  so 
much  of  the  lands  granted  by  the  Act  of 
July  twenty-fifth,  eighteen  hundred  and  sixty- 
six,  entitled  "An  Act  granting  lands  to  aid 
in  the  construction  of  a  railroad  and  telegraph 
line  from  the  Central  Pacific  Railroad  in 
California  to  Portland,  in  Oregon, "  as  amended 


33 

by  the  Acts  of  eighteen  hundred  and  sixty- 
eight  and  eighteen  hundred  and  sixty-nine, 
for  which  patents  have  been  issued  by  the 
United  States,  or  for  which  the  grantee  is 
entitled  to  receive  patents  under  said  grant, 
and  to  so  much  of  the  lands  granted  by  the 
Act  of  May  fourth,  eighteen  hundred  and 
seventy,  entitled  "An  Act  granting  lands 
to  aid  in  the  construction  of  a  railroad  and 
telegraph  line  from  Portland  to  Astoria  and 
McMinnville,  in  the  State  of  Oregon,"  for 
which  patents  have  been  issued  by  the  United 
States,  or  for  which  the  grantee  is  entitled 
to  receive  patents  under  said  grant,  as  had 
not  been  sold  by  the  Oregon  and  California 
Railroad  Company  prior  to  July  first,  nine- 
teen hundred  and  thirteen,  be,  and  the  same 
is  hereby,  revested  in  the  United  States: 
Provided,  That  the  provisions  of  this  Act 
shall  not  apply  to  the  right  of  way  to  the 
extent  of  one  hundred  feet  in  width  on  each 
side  of  the  railroad  and  all  lands  in  actual 
use  by  said  railroad  company  on  December 
ninth,  nin  teen  hundred  and  fifteen,  for  depots, 
sidetracks,  wood  yards,  and  standing  grounds. 
Sec.  7.  That  the  Attorney  General  of  the 
United  States  be,  and  he  is  hereby,  authorized 
and  directed  to  institute  and  prosecute  any 
and  all  suits  in  equity  and  actions  at  law 
against  the  Oregon  and  California  Railroad 
Company,  and  any  other  proper  party  which 
he  may  deem  appropriate,  to  have  determined 
the  amount  of  moneys  which  have  been  re- 
ceived by  the  said  railroad  company  or  its 
predecessors  from  or  on  account  of  any  of 


34 

said  granted  lands,  whether  sold  or  unsold, 
patented  or  unpatented,  and  which  should  be 
charged  against  it  as  a  part  of  the  "  full  value" 
secured  to  the  grantees  under  said  granting 
Acts  as  heretofore  interpreted  by  the  Supreme 
Court.  In  making  this  determination  the 
court  shall  take  into  consideration  and  give 
due  and  proper  legal  effect  to  all  receipts  of 
money  from  sales  of  land  or  timber,  forfeited 
contracts,  rent,  timber  depredations,  and  in- 
terest on  contracts,  or  from  any  other  source 
relating  to  said  lands;  also  to  the  value  of 
timber  taken  from  said  lands  and  used  by  said 
grantees  or  their  successor  or  successors.  In 
making  this  determination  in  the  aforemen- 
tioned suit  or  suits  the  court  shall  also  deter- 
mine, on  the  application  of  the  Attorney  Gen- 
eral, the  amount  of  the  taxes  on  said  lands 
paid  by  the  United  States,  as  provided  in  this 
Act,  and  which  should  in  law  have  been  paid 
by  the  said  Oregon  and  California  Railroad 
Company,  and  the  amount  thus  determined 
shall  be  treated  as  money  received  by  said 
railroad  company. 

Sec.  8.  That  the  title  to  all  money  arising 
out  of  said  grant  lands  and  now  on  deposit  to 
await  the  final  outcome  of  said  suit  commenced 
by  the  United  States  in  pursuance  of  said  joint 
resolution  of  nineteen  hundred  and  eight  is 
hereby  vested  in  the  United  States,  and  the 
United  States  is  subrogated  to  all  the  rights 
and  remedies  of  the  obligee  or  obligees,  and 
especially  of  Louis  L.  Sharp  as  commissioner, 
under  any  contract  for  the  purchase  of  timber 
on  the  grant  lands. 


35 

Sec.  9.  That  the  taxes  accrued  and  now  un- 
paid on  the  lands  revested  in  the  United  States, 
whether  situate  in  the  State  of  Oregon  or 
State  of  Washington,  shall  be  paid  by  the 
Treasurer  of  the  United  States,  upon  the  order 
of  the  Secretary  of  the  Interior,  as  soon  as  may 
be  after  the  approval  of  this  Act,  and  a  sum 
sufficient  to  make  such  payment  is  hereby 
appropriated,  out  of  any  money  in  the  Treas- 
ury not  otherwise  appropriated. 

Sec.  10.  That  all  moneys  received  from  or 
on  account  of  said  lands  and  timber  under  the 
provisions  of  this  Act  shall  be  deposited  in 
the  Treasury  of  the  United  States  in  a  special 
fund,  to  be  designated  "The  Oregon  and  Cali- 
fornia land-grant  fund,"  which  fund  shall  be 
disposed  of  in  the  following  manner:  The  Sec- 
retary of  the  Interior  shall  ascertain  as  soon 
as  may  be  the  exact  number  of  acres  of  said 
lands,  sold  or  unsold,  patented  to  the  Oregon 
and  California  Railroad  Company,  or  its  pre- 
decessors, and  the  number  of  acres  of  unpat- 
ented lands  which  said  railroad  company  is 
entitled  to  receive  under  the  terms  of  said 
grants,  and  the  value  of  said  lands  at  $2.50 
per  acre.  From  the  sum  thus  ascertained  he 
shall  deduct  the  amount  already  received  by 
the  said  railroad  company  and  its  predecessors 
in  interest  on  account  of  said  lands,  and  which 
should  be  charged  against  it  as  determined 
under  section  seven  of  this  Act;  and  a  sum 
equal  to  the  balance  thus  resulting  shall  be 
paid,  as  herein  provided,  to  the  said  railroad 
company,  its  successors  or  assigns,  and  to 
those  having  liens  on  the  land,  as  their  re- 


36 

spective  interests  may  appear.  The  amount 
due  lien  holders  shall  be  evidenced  either  by 
the  consent,  in  writing,  of  the  railroad  com- 
pany or  by  a  judgment  of  a  court  of  compe- 
tent jurisdiction  in  a  suit  to  which  the  railroad 
company  and  the  lien  holders  are  parties. 
Payments  shall  be  made  from  time  to  time, 
as  the  fund  accumulates,  by  the  Treasurer  of 
the  United  States  upon  the  order  of  the  Sec- 
retary of  the  Interior:  Provided,  however,  That 
if,  upon  the  expiration  of  ten  years  from  the 
approval  of  this  Act,  the  proceeds  derived 
from  the  sale  of  lands  and  timber  are  not  suf- 
ficient to  pay  the  full  amount  which  the  said 
railroad  company,  its  successors  or  assigns,  are 
entitled  to  receive,  the  balance  due  shall  be 
paid  from  the  general  funds  in  the  Treasury 
of  the  United  States,  and  an  appropriation 
shall  be  made  therefor.  After  the  said  rail- 
road company,  its  successors  or  assigns,  and 
the  lien  holders,  shall  have  been  paid  the 
amount  to  which  they  are  entitled,  as  pro- 
vided herein,  an  amount  equal  to  that  paid 
for  accumulated  taxes,  as  provided  in  section 
nine  hereof,  shall  be  deposited  in  the  Treasury 
to  the  credit  of  the  United  States;  thereafter 
all  other  moneys  received  from  the  sales  of 
land  and  timber  shall  be  distributed  as  fol- 
lows: (Remainder  of  section  not  material 
here.)     (39  Stat.,  218.) 

A  word  of  explanation  with  regard  to  these  sec- 
tions, except  the  first  and  tenth  which  need  none. 

The  railroad  company  has  sold  about  800,000 
acres,  the  proceeds  of  which,  together  with  moneys 
derived    from    other    sources    connected    with    the 


37 

grants,  reach  about  $5,506,870.97,  or  $3,506,870.97 
more  than  the  company  would  be  entitled  to  at  $2.50 
an  acre  (statement,  case  for  Govt,  former  hearing, 
p.  83). 

Under  section  9  the  Government  is  to  pay  to  Oregon 
and  Washington  the  taxes  due  on  the  lands,  totaling 
about  $1,300,000.  Whether  the  excess  over  $2.50 
an  acre  received  by  the  railroad  company,  as  just 
stated,  constitutes,  in  the  words  of  the  opinion,  an 
" illegal  emolument"  (238  U.  S.  p.  436)  and  should 
be  deducted,  together  with  the  taxes  paid,  from  what 
would  otherwise  be  coming  to  the  railroad  company 
in  the  Government's  settlement  with  it,  are  questions 
referred  to  the  courts  by  section  7. 

The  money  mentioned  in  section  8  is  the  same  as 
that  mentioned  in  section  3  of  the  decree.  Its  re- 
lation to  the  granted  lands  is  shown  in  the  discussion 
with  respect  to  that  part  of  the  decree.  (Supra, 
p.  16.) 

Stated  otherwise,  the  act  revests  the  title  in  the 
United  States  to  all  the  unsold  lands  and  provides 
for  the  payment  to  the  railroad  company  within  ten 
years  of  the  balance  that  may  be  coming  to  it  on  a 
basis  of  $2.50  an  acre  for  the  total  acreage  covered 
by  the  two  grants  after  making  all  proper  deductions. 
Thus  the  railroad  company  is  assured  the  maximum 
amount — $2.50  per  acre — which  under  any  circum- 
stances, no  matter  how  favorable,  it  would  be  entitled 
to  receive  under  the  grants  as  construed  by  this  court. 
This  is  far  more  than  it  could  possibly  receive  if  it 
sold  the  lands  under  the  terms  of  the  restrictive 


38 

provisos.  In  such  case  it  could  receive  no  more,  as 
we  have  just  said,  than  $2.50  an  acre;  but  in  many 
cases  it  would  not  obtain  that  sum  or  even  a  fair 
share  of  it.  This  is  so  because  considerable  of  the 
land  is  without  merchantable  timber  and  is  also  un- 
cultivable.  The  appellants  urged  in  effect  at  the 
former  hearing  that  a  great  deal  of  it  "was  nothing 
but  a  wilderness  of  mountain  and  rock"  (238  U.  S. 
p.  422).  While  we  do  not  admit  this  contention  to 
its  full  extent,  we  must  concede  that  it  is  true  in  part. 
In  providing,  therefore,  that  the  railroad  company 
shall  receive  $2.50  per  acre  for  all  the  land,  whether 
good  or  bad,  Congress  has  been  more  than  just — it 
has  been  very  generous. 

Payment  of  the  amount  due  the  railroad  company 
is  amply  secured.  Section  ten  says  that  payments 
shall  be  made  from  time  to  time  as  the  funds  accu- 
mulate and  if  after  the  expiration  of  ten  years  the 
proceeds  from  the  sales  are  not  sufficient  to  discharge 
the  full  amount  due,  the  balance  shall  be  paid  out  of 
the  general  funds  in  the  Treasury.  The  railroad 
company  has  no  ground  for  complaint  here.  In  a 
little  more  than  ten  years,  it  is  assured  of  all  the 
money  rightfully  coming  to  it,  and  in  the  meantime 
it  is  free  from  any  obligation  to  pay  taxes.  It  is  safe 
to  say  that  in  this  way  it  will  receive  not  only  more 
money  by  far,  but  will  receive  it  much  sooner,  than 
if  the  Chamberlain-Ferri§  Act  had  not  been  enacted. 

Did  the  granting  acts  confer  upon  the  railroads  any 
other  "  value"  than  that  flowing  from  the  right  to  sell 
the  land  for  a  sum  not  to  exceed  $2.50  an  acre,  and  if 


39 

so,  is  it  secured  to  the  appellants  by  the  Chamberlain- 
Ferris  Act?  The  granting  act  of  1866  gave  to  the 
railroad  the  right  "to  take  from  the  public  lands 
adjacent  to  the  line  of  said  road,  earth,  stone,  tim- 
ber, water,  and  other  materials  for  the  construction 
thereof,"  also  a  right  of  way  through  the  public 
lands  "to  the  extent  of  one  hundred  feet  in  width 
on  each  side  of  said  railroad  *  *  *  including  all 
necessary  grounds  for  stations,  buildings,  workshops, 
depots,  machine  shops,  switches,  sidetracks,  turn- 
tables, water  stations,  or  any  other  structures  re- 
quired in  the  construction  and  operating  of  said 
road"  (Sec.  3,  14  Stat.  239,  240). 

Like  rights  were  conferred  by  the  grant  of  1870 
upon  the  grantee  (sec.  1,  16  Stat.  94). 

The  right  to  take  materials  from  the  public  lands 
for  constructing  the  road  has,  of  course,  been  ex- 
hausted because  the  line  of  road  contemplated  by 
section  1  of  each  act  has  been  built  long  since. 
Besides,  the  Chamberlain-Ferris  Act  does  not  dis- 
turb it.  The  rights  of  way,  station  grounds,  etc., 
appropriated  by  the  defendants  from  the  granted 
lands  are  saved  to  them  by  the  proviso  to  section  1 
of  the  Chamberlain-Ferris  Act,  which  reads: 

That  the  provisions  of  this  Act  shall  not 
apply  to  the  rights  of  way  to  the  extent  of 
one  hundred  feet  in  width  on  each  side  of  the 
railroad  and  all  land$  in  actual  use  by  said 
railroad  company  on  December  ninth,  nineteen 
hundred  and  fifteen,  for  depots,  sidetracks, 
wood  yards,  and  standing  grounds. 


40 

[December  9  was  taken  because  it  is  the  date  of  the 
decree  now  before  the  court  for  review.] 

1.  CERTAIN  RIGHTS  CLAIMED  BY  APPELLANTS. 

There  is,  as  we  have  noticed  (supra,  p.  8),  a  conten- 
tion on  the  part  of  appellants  that  the  railroad  com- 
pany had  the  right  under  the  granting  acts  to  cut  the 
timber,  or  mine  the  coal,  if  there  be  any,  and  sell  it 
irrespective  of  the  provisos,  or  use  it  as  fuel  in  its  lo- 
comotives; that  it  also  had  the  right  to  farm  the 
land,  sell  the  crops,  and  apply  the  proceeds  on  its 
debt;  and  that  the  Chamberlain-Ferris  Act  does  not 
provide  for  the  value  of  any  of  those  rights.  There 
are  several  answers  at  hand : 

(a)  The  questions  thus  raised  have  become  res  ju- 
dicata (supra,  p.  15). 

(b)  The  railroad  company's  charter  does  not  au- 
thorize it  to  engage  in  farming,  mining,  or  logging 
(R.  Vol.  I,  p.  89,  former  hearing)  and  besides,  there 
is  no  warrant  in  the  granting  acts,  or  the  debates  at 
the  time  they  were  enacted,  for  saying  that  Congress 
intended  that  the  railroad  company  could  put  the 
lands  to  any  such  purpose. 

(c)  Even  if  the  granting  acts  conferred  those  rights, 
they  are,  when  judged  by  the  conduct  of  the  railroad 
company,  of  practically  no  value.  During  the  long 
period  of  the  company's  ownership  of  the  lands  it 
had  never  mined  a  ton  of  coal,  cultivated  an  acre  of 
land,  or  used  a  piece  of  timber  taken  from  the  lands 
save  only  to  the  value  of  $18,850.25.  (Statement,  Case, 
Govt.,  former  hearing,  p.  83.)     x\nd  this  small  value 


41 

is  more  than  compensated  for  in  the  $2.50  an  acre 
allowed  by  the  Chamberlain-Ferris  Act,  for,  as  we 
have  shown  and  the  record  amply  discloses,  there 
are  thousands  of  acres  for  which  the  company  could 
not  receive  any  thing  if  their  right  to  sell  had  not 
been  disturbed  by  the  Chamberlain-Ferris  Act  (supra, 
p.  37),  because  they  are  mountain  sides,  barren  rocks, 
without  timber,  and  uncultivable.  For  each  such 
acre  the  Chamberlain-Ferris  Act  allows  the  company 
$2.50.  In  this  connection,  let  us  repeat,  that  under 
the  opinion  of  the  court,  Congress  is  not  to  secure 
rights,  but  "the  value"  of  the  rights,  to  the  railroad 
company  (238  U.  S.  429). 

(d)  The  purposes  of  the  granting  acts  according  to 
the  interpretation  of  this  court  were  two,  namely  (1) 
the  building  of  the  railroad,  and  (2)  the  settlement  of 
the  country.  And  "  the  secondary  purpose,"  says  the 
court  "was  regarded  and  provided  for  in  the  provisos 
under  review.  Both  purposes  must  be  considered. 
It  may  be  that  it  was  not  expected  that  actual  settlers 
would  crowd  into  'the  vast  unpeopled  territory'  but 
the  existence  of  such  settlers  at  some  time  must  have 
been  actually  contemplated.  Both  purposes,  we 
repeat,  were  to  be  subserved,  and  how  to  subserve 
them  is  the  problem  of  the  case."  (238  U.  S.  supra, 
417.)  Again,  referring  to  the  granting  acts,  the 
court  mentions  "the  accomplishment  of  their  pur- 
poses— either  of  the  construction  of  the  road,  or  sale 
to  actual  settlers"  (420).  The  secondary  purpose,  it 
is  clear,  would  be  defeated  if  the  railroad  company 
had  the  right  to  farm  the  land.     Such  a  use  would  be 


42 

inconsistent  with  the  idea  of  small  tracts — 160  acres — 
dotted  with  homes  belonging  to  the  occupants — "  A 
bold  peasantry  their  country's  pride."  This  was  the 
character  of  settlement  which  Congress  contemplated, 
not  an  immense  area  owned  by  an  absentee  landlord 
and  cultivated  by  a  poor  tenantry — the  curse  of  older 
countries.  It  was  to  prevent  just  such  a  condition  as 
that,  that  the  restrictive  provisos  were  adopted. 
This  was  shown  in  the  former  argument  (brief, 
p.  42  et  seq),  which  is  noticed  in  the  opinion  of  the 
court  (414). 

(e)  According  to  appellants'  witnesses,  it  would 
cost  from  $50  to  $500  to  clear  the  stumps  from  an 
acre  of  land.  (Reduced  summary  of  testimony 
attached  to  Government's  statement  of  case, 
former  hearing.)  Uncleared  land  of  that  char- 
acter would  have  no  attractions  for  settlers — it 
would  on  the  contrary  repel  settlement  and  thus 
defeat  the  secondary  purpose  of  the  grants.  If,  on 
the  other  hand,  the  land  had  not  been  denuded  of 
its  timber,  the  settler  could  sell  the  timber,  and  thus 
realize  enough  to  clear  the  land  and  otherwise  im- 
prove it. 

But  we  deny  that  the  railroad  company  had  any 
right  to  farm,  log,  or  mine  the  lands ;  it  had  no  right  to 
take  anything  from  them  save  perhaps  a  right  of  way 
and  depot  grounds — which  are  preserved  by  the  Cham- 
berlain-Ferris Act.  This  View  is  not  inconsistent  with 
the  finding  of  the  court  that  "there  was  a  complete 
and  absolute  grant  to  the  railroad  company  with 
power  to  sell,  limited  only  as   prescribed"  (434) — 


43 

" limited  only  as  prescribed,"  but  " there's  the  rub." 
Nothing  was  contemplated  which  would  collide  with 
the  limitations — the  settlement  provisos — and  the 
claims  we  are  now  discussing  would  do  so.  There- 
fore, they  must  be  rejected. 

Finally,  as  we  have  before  remarked,  there  is  no 
authority  in  the  railroad  company  to  divide  the 
lands  into  three  parts — soil,  mineral,  and  timber — 
and  then  free  two  from  the  burden  of  the  limitations 
imposed  by  the  restrictive  provisos. 

2.  CASES  CITED  BY  APPELLANTS. 

Appellants,  railroad  company  and  Gage,  cite  a 
number  of  cases  and  argue  at  some  length  to  the  effect 
that  a  grantee  of  lands  from  the  Government  may 
dispose  of  them  as  he  pleases,  subject  to  such  restric- 
tions as  the  granting  act  imposes.  These  cases  illus- 
trate no  point  of  controversy  in  the  case  at  bar. 
Schulenberg  v.  Ilarriman  (21  Wall.  44)  and  Fletcher  v. 
Peck  (6  Cranch,  87)  may  be  taken  as  types  of  all  the 
others.  In  the  first  case  the  grant  was  upon  a  condition 
subsequent.  The  condition  was  broken.  After  this 
had  happened,  and  before  any  action  was  taken  by 
the  grantor  to  reenter  and  reclaim  the  title,  Schulen- 
berg, a  stranger  to  the  title,  went  upon  the  lands 
and  cut  therefrom  some  timber.  The  grantee  through 
its  agent,  Harriman,  seized  the  logs  that  Schulenberg 
had  cut,  and  thereupon  the  latter  sued  to  recover 
them  through  a  replevin  action:  Thus  was  presented 
the  question  as  to  whether  he  or  the  grantee  had  title. 
The  decision  was,  of  course,  that,  since  the  grantor 


44 

had  never  taken  any  action  to  enforce  the  condition 
subsequent,  the  title  to  the  land  remained  in  the 
grantee,  and,  consequently,  it  had  a  title  to  the 
logs.  "The  title  to  the  land  remaining  in  the  State" 
(the  grantee),  said  this  court,  "the  lumber  cut  upon 
the  land  belonged  to  the  State."  This  is  elemen- 
tary law  with  respect  to  conditions  subsequent. 
But  what  has  it  to  do  with  the  case  at  bar?  Is  it 
cited  for  the  purpose  of  showing  that  title  to  the 
timber  as  well  as  to  the  surface  of  the  land  was, 
by  virtue  of  the  granting  act,  conveyed  to  the 
grantee?  If  so,  we  admit  it.  Of  course,  in  such 
circumstances,  the  title  to  the  timber  passed  to  the 
grantee  with  the  surface  of  the  land,  because  it  was 
a  pari  of  the  land. 

What  we  are  here  dealing  with,  however,  is  the 
remedy  which  the  court  has  given  the  Govern- 
ment because  the  grantee  railroad  company  had 
for  nearly  forty  years  violated  its  contracts — the 
granting  acts — with  the  Government.  "The  play's 
the  thing."  And  so  here  the  remedy  is  the  point 
of  controlling  interest.  Where  an  execution  has 
been  issued  upon  a  judgment  rendered  against  a 
man  for  a  breach  of  contract  for  the  purchase  of  a 
tract  of  land,  it  is  too  late  for  him  when  opposing  the 
execution  of  the  writ  to  ask  the  court  to  reexamine 
the  contract  for  the  purpose  of  dt  termini  rig  whether 
or  not  it  had  been  bread  *hj.  The  same  is  true  here. 
We  have  passed  the  stage  when  it  was  proper  to 
consider  whether  the  railroad  company  had  violated 
its  contract  with  the  Government.     This  court  has 


45 

adjudged  that  it  had,  and  now  we  are  dealing,  as 
just  observed,  with  the  remedy  awarded  by  the  court. 
Nor  is  there  any  question  here,  as  in  Fletcher  v. 
Peck  (supra,  p.  43),  of  the  right  of  Congress  to  recall 
a  grant  where  there  has  been  no  breach  of  the  con- 
tract upon  which  it  was  made.  Here,  as  we  have 
said,  there  was  a  breach  and  a  grave  one  long  per- 
sisted in.  None  of  the  cases  cited  is  authority  for 
the  proposition  that  property  may  not  be  taken  in 
satisfaction  of  a  judgment  rendered  by  a  court  of 
competent  jurisdiction.  Whether  the  taking  is  done 
through  an  act  of  Congress,  or  a  sale  by  a  master,  or 
in  any  other  way,  can  make  no  difference.  The  court, 
as  we  have  shown  (supra,  p.  28),  has  a  right  to  select 
the  means  most  appropriate  to  the  end  in  view — 
compensation  for  the  breach. 

3.  THE  UNION  TRUST  COMPANY. 

In  its  brief  this  company  seems  to  proceed  upon 
the  hypothesis  that  the  contract  between  the  Gov- 
ernment and  the  railroad  was  faithfully  kept  by 
the  latter.  No  account  whatever  is  taken  of  the 
important  fact  that  for  nearly  forty  years  that  con- 
tract was  in  large  part  utterly  ignored.  A  stranger 
to  the  record  reading  the  brief  would  be  led  to 
conclude  that  the  malefactor  in  the  case  was  the 
Government,  not  the  railroad  company.  Of  course, 
starting  from  such  a  premise  the  conclusion  must 
be  erroneous.  The  rights  of  the  Trust  Company 
are  measured  by  those  of  the  railroad  company. 
They  can  be  no  greater.     This  court  said  in  the 


46 

opinion  under  review  that  the  railroad  company 
might  choose  the  grants  as  a  means  of  credit — 

subject  ultimately  to  the  restrictions  imposed; 
we  say  "restrictions  imposed"  to  reject  the 
contention  of  the  railroad  company  that  an  im- 
plication of  the  power  to  mortgage  the  lands 
carries  a  right  to  sell  on  foreclosure  divested 
of  the  obligations  of  the  provisos.  (238  U.  S. 
supra,  435.)     (Italics  ours.) 

The  Trust  Company,  and  also  the  railroad  company, 
seem  to  overlook  this  statement.  After  enumerating 
certain  pertinent  facts,  the  court  said  (438) : 

This,  then,  being  the  situation  resulting 
from  conditions  now  existing  incident,  it  may 
be,  to  the  prolonged  disregard  of  the  covenants 
by  the  railroad  company  the  lands  invite  now 
more  to  speculation  than  to  settlement. 

In  other  words,  the  railroad  company,  by  its  many 
breaches  of  the  contract  between  it  and  the  Gov- 
ernment, had  brought  about  a  condition  of  things 
which  tended  to  prevent  the  accomplishment  of  the 
second  purpose  of  the  grants,  namely,  settlement 
of  the  country.  This  being  so,  an  adequate  remedy 
required  the  interposition  of  Congress,  and  so  the 
court  decreed.  Neither  the  railroad  company,  there- 
fore, nor  the  trust  company,  is  in  a  position  to  com- 
plain of  the  consequence  which  the  conduct  of  the 
former  has  brought  upon  both. 

Moreover,  the  trust  c<\hpany  fails  to  attach  any 
significance,  apparently,  to  that  all-important  part 
of  the  judgment  of  this  court,  i?v  which  it  says,  in 
effect,  that  defendants  shall  be  restrained— 


47 

until  Congress  shall  have  a  reasonable  oppor- 
tunity to  provide  by  legislation  for  their  (the 
lands)  disposition  in  accordance  with  such 
policy  as  it  may  deem  fitting  under  the  cir- 
cumstances (238  U.  S.,  supra,  438).  (Italics 
ours.) 

These  words  have  weighty  meaning  and  can  not  be 
ignored.  It  is  largely  upon  their  import  the  case 
must  turn. 

(Note. — The  trust  company  has  ample  security 
outside  of  the  lands  in  question.  Government's 
Brief,  former  hearing,  p.  183.) 

4.  "UNCOMPENSATED  SERVICES." 

Again  and  again  appellants  speak  of  the  "  uncom- 
pensated services  rendered  and  to  be  rendered  by  the 
railroad  company  through  all  the  years  in  transport- 
ing Government  troops  and  materials."  While  this, 
like  many  other  statements  in  appellants'  brief,  is 
not  now  open  for  discussion,  it  may  not  be  deemed 
inappropriate  to  invite  attention  to  the  grave  mis- 
conception of  the  contract  with  the  Government 
which  it  discloses.  It  is  in  no  sense  correct  to  say 
that  the  services  mentioned  are  "  uncompensated.' ' 
They  are  already  paid  for  in  advance  by  the  grants. 
The  railroad  company  agreed,  by  accepting  the  grants, 
to  render  those  services  as  a  part  of  the  consideration 
of  the  grants.  The  maximum  value  of  the  grants  was 
$2.50  per  acre.  That,  as  fore*  have  seen,  was  the 
highest  amount  the  riilroad  companies  were  permitted 
to  receive  out  of  the^sale  of  the  lands.  The  Chamber- 
lain-Ferris Act  secures  that  sum  to  them.     In  return 


48 

for  it,  they  agreed  to  render  the  service  mentioned  and 
to  do  other  things.  How  utterly  out  of  accord  with 
the  facts,  then,  is  it  to  say  that  such  services  are 
"  uncompensated . "  Is  the  contract  between  the  Gov- 
ernment and  the  railroad  company  regarded  by  the 
latter  as  nothing  more  than  a  mere  "  scrap  of  paper"  ? 
We  see,  therefore,  that  every  existing  right  given 
to  the  railroads  by  the  two  granting  acts  is  amply 
taken  care  of  in  the  Chamberlain-Ferris  Act.  Con- 
sequently Congress  has  secured  to  the  defendants 
"all  the  value  conferred  upon  the  railroads  by  the 
granting  acts." 

III. 

THE  COURT  HAS  POWER  TO  DETERMINE  THE  VALIDITY 
OF  THE  CHAMBERLAIN-FERRIS  ACT  IN  CONNECTION 
WITH  THIS  APPEAL. 

The  mandate,  as  we  have  seen,  directed  the  lower 
court  to  enter  a  decree  and  referred  the  disposition  of 
the  lands  to  Congress.  Although  Congress  was  not,  of 
course,  commanded  to  act,  it  was  not  only  invited  to 
do  so,  but  its  duty  to  act  was  made  very  clear.  The 
preamble  to  the  Chamberlain-Ferris  Act  in  effect 
declares  that  Congress  accepted  the  invitation  and 
admitted  the  duty.  The  act  is  as  much  a  part  of 
the  execution  of  the  judgment  of  this  court  as  the 
decree.  Both  are  necessary  to  give  it  full  effect. 
If  Congress  had  failed  tp  act,  mi.  £fr  of  the  potency  of 
the  judgment  would  b  !  wasted.  I  Appellants  deny  that 
the  Chamberlain-Ferris  Act  is  in  consonance  with  the 
judgment,  and  predicate  the  sam  i  thing  of  the  decree. 
Thus  is  presented  the  question  as  to  whether,  by  the 
congressional  act  and   court  decree,   the  judgment 


49 

has  been  carried  out  in  harmony  with  its  terms. 
Why,  then,  is  it  not  proper,  as  indeed  it  is  very  desir- 
able, that  the  validity  of  the  act  should  be  decided 
in  conjunction  with  that  of  the  decree?  True  the 
validity  of  the  former  is  not  here  on  appeal.  But  is 
that  material? 

In  Clark  Distilling  Company  v.  Western  Maryland 
Railway  Company  et  al.,  decided  Jan.  8,  1917,  this 
court  considered  and  gave  effect  to  a  statute  of 
West  Virginia  passed  after  the  case  had  reiched 
the  court  on  appeal,  saying: 

As  the  relief  sought  is  the  permanent  right 
to  ship  in  the  future,  the  meaning  of  the 
statute  now,  that  is,  as  amended,  is  the 
test  by  which  we  must  consider  the  questions 
requiring  solution. 

United  States  v.  Mormon  Church  (15G,  U.  S.  145) 
was  a  case  in  which  this  court  held  that  Congress 
had  the  power  to  "dispose"  of  the  property  of  a 
defunct  corporation  (145) .  And  the  mandate  directed 
the  lower  court  to  enter  a  judgment  in  conformity 
with  the  opinion  of  this  court  "unless  in  the  mean- 
time Congress  should  otherwise  order."  (147.)  A 
decree  was  entered  and  from  it  an  appeal  taken 
to  this  court.  Pending  the  appeal,  Congress,  as 
in  the  case  at  bar,  took  action  resulting  in  a  disposi- 
tion of  the  property  This  was  brought  to  the  atten- 
tion of  the  court,  wUich  hob  asked  to  consider  it  in 
connection  with  the  appeal.     It  did  so,  saying: 

It  will  be -perceived  that  judicial  action  is 
not  sought  to  be  controlled  by  the  resolution 


50 

[of  Congress],  but  that  this  court  having 
indicated  the  mode  to  be  pursued  to  ascertain 
and  define  the  particular  charitable  uses, 
lawful  in  their  character,  to  which  the  property 
should  be  devoted,  in  the  absence  of  legisla- 
tion upon  the  subject,  and  this  appeal  from 
the  decree  of  the  court  below  to  that  end 
having  been  taken,  Congress  has  now  declared 
such  uses.     (149.) 

In  the  present  case  this  court  also  indicated  the 
course  to  be  taken  by  the  lower  court  "in  the  ab- 
sence of  legislation  upon  the  subject."  (238,  U.  S. 
439,  supra.) 

Since  it  was  proper  to  consider  and  give  effect  to 
the  action  of  Congress  in  the  Mormon  Church  case,  it 
is  equally  proper,  we  submit,  to  consider  and  give 
effect  to  it  here. 

Besides,  the  power  of  the  court  to  determine 
whether  its  mandate  was  obeyed  is  not  appellate 
only.  It  could  be  invoked  by  a  direct  application 
for  a  mandamus.  (In  re  Potts,  166  U.  S.  263.)  The 
power  is  an  incident  of  the  jurisdiction  which  the 
court  exercised  in  deciding  the  original  case.  In  ask- 
ing the  court  to  judge  the  validity  of  the  Chamber- 
lain-Ferris Act  we  call  for  an  exercise  of  the  same 
jurisdiction. 

The  only  question  then  left  is  one  of  procedure, 
and  as  the  Government  and  appellants  unite  in  asking 
the  court  to  decide  tljs  ^ilidity  of  the  act  in  connec- 
tion with  this  appeal,  that  ques**on  is  waived. 

Assuming  the  existence  of  the ■■x,.<asver,  we  trust  the 
court  will  not  decline  to  exercise  it,  for  it  is  of  great 


51 

importance  to  the  public  interest  in  Washington 
and  Oregon  that  the  validity  of  the  act  should  be 
determined  soon.  Until  it  is,  the  appellants  will 
resist  any  attempt  on  the  part  of  the  Government  to 
deal  with  the  lands,  and  the  appellants  are  restrained 
from  meddling  with  them.  The  lands  constitute 
the  greater  part  of  the  taxable  property  in  many  of 
the  counties.  For  several  years,  as  we  have  already 
stated,  none  of  the  taxes  levied  upon  them  have 
been  paid  and  in  consequence  counties  affected  have 
been  pushed  to  the  verge  of  bankruptcy.  The  Gov- 
ernment is  ready  to  pay  those  taxes  as  soon  as  the 
validity  of  the  act  is  adjudged. 

In  conclusion,  permit  us  to  urge  that  the  decree 
of  the  lower  court  and  the  Chamberlain-Ferris  Act 
are  in  strict  accordance  with  the  opinion  and  decision 
of  this  court  and  are  therefore  valid. 

Respectfully  submitted. 

John  W.  Davis, 

Solicitor  General. 

CONSTANTINE    J.    SMYTH, 

Special  Assistant  to  the  Attorney  General. 
March  3,  1917. 

o 


*  « 


\4. 


No.  492. 


Office  Supreme  Court,  U.  S. 

FILED 

P£B  23  1917 


IN  THE 

Supreme  Court  of  the  United  States. 


October  Term,  1916. 

OREGON  &  CALIFORNIA  RAILROAD  COMPANY,  a  corpo- 
ration, et  al., 

Defendants  and  Appellants, 

against 

UNITED  STATES  OF  AMERICA, 

Appellee. 


BRIEF  FOR  UNION  TRUST  COMPANY  OF 

NEW  YORK,  DEFENDANT  AND 

APPELLANT. 


DOLPH,  MALLORY,  SIMON  &  GEARIN, 
MILLER,  KING,  LANE  &  TRAPFORD, 
Solicitors  for  Union  Trust  Company 
of  New  York. 


PERRY  D.  TRAFFORD, 

Counsel. 


B.   H.  TYRREL.  PRINTER,  206-8  FULTON  STREET,  NEW  YOBK. 


SUBJECT  INDEX. 


PAGE 

STATEMENT 1-6 

Land  grant 2 

Mortgage  to  Union  Trust  Co 3 

Sale  of  lands 3 

Suit  for  forfeiture 4 

Decree  upon  the  mandate 5 

Legislature  by  Congress — Summary  of 5 

ASSIGNMENT  OF  ERRORS 6 

ARGUMENT 8-73 

Position  of  Union  Trust  Company,  Trustee 

of  the  Mortgage 8 

POINT    I. — The     Act   of     Congress   approved   June   9, 

1916,  is  invalid 10-51 

A. — The  Act  is  not  within  the  powers  given  to  the 
Congress  by  the  Constitution. 

(1)  Relation  of  Government  and  railroad  is 
contractual 10 

(2)  Contract  must  be  given  its  fair  mean- 
ing          11 

(3)  Congress  cannot  impair  contracts  even 
between   citizens 11 

(4)  On  general  principles,  Congress  cannot 

take  back  lands  sold  by  it 11 

(5)  Enforcement  of  the  contract  is  within 

the  province  of  a  court 15 

(6)  Act  is  not  within  express  or  implied 
powers  of  Congress 17 

B. — The  Act  of  June  9,  1916,  is  in  violation  of  the 
Fifth  Amendment  of  the  Constitution. 

(1)   The  taking  of  property  by  legislation  is 

expressly  prohibited 18 


11 


PAGE 

(2)  Act  is  squarely  within  the  meaning  of 

the  Fifth  Amendment 19 

(3)  Railroad  has  absolute  title  and  every  in- 
cident of  ownership 20 

(4)  Vested  rights  as  well  as  title  are  taken 

by  the  Act 21 

(5)  Railroad  is  deprived  of  the  right  to  use 

the  lands  as  a  basis  of  credit 22 

(6)  Theory  of  the  Government  that  Rail- 
road has  no  property  rights  is  un- 
founded          22 

(7)  Railroad  has  property  rights  (in  addi- 
tion to  right  to  timber) 23 

(8)  Railroad  is  entitled  to  use  the  coal  and 

iron 23 

(9)  Lands  are  not  taken  under  ''due  process 

of  law"  but  directly  contrary  thereto. .         24 

C. — The  Act  of  June  9,  1916,  is  unconstitutional 
because  it  cancels  the  lien  of  the  mortgage  of 
the  Union  Trust  Company,  as  trustee  for 
bondholders,  and  takes  away  its  vested  rights 
as  trustee  under  said  mortgage. 

(1)  Mortgagee  has  rights  in  addition  to 
those  now  possessed  by  railroad 25 

(2)  Railroad  had  power  to  mortgage 26 

(3)  Mortgage  is  valid  and  for  valuable  con- 
sideration            26 

(4)  Security  other  than  that  bargained  for 
cannot  be  substituted   27 

(5)  Right  to  foreclose,  etc.,  is  essential  part 

of  mortgage 27 

(6)  List  of  rights  conveyed  by  this  mort- 
gage            28 


in 


PAGE 

(7)  Effect  of  Act  on  mortgagee's  vested 
rights 28 

(8)  Substitutes  for  vested  rights  offered  by 

Act  are  inadequate  29 

(9)  Moneys  now  on  deposit  cannot  be 
seized 32 

(10)  Eights  conveyed  by  mortgage  are 
vested  rights  32 

(11)  Summary  as  to  mortgage,  lien,  etc..  . .         34 

D. — The  taking  of  the  lands  by  the  Government 
and  the  cancellation  of  the  lien  and  other 
rights  secured  to  the  Union  Trust  Company 
by  the  mortgage  cannot  be  supported  under 
the  reservation  contained  in  the  Act  of  July 
25,  1866,  to  alter,  amend,  etc. 

(1)  No  power  to  amend  is  reserved  in  grant 

of  1870    35 

(2)  Limitation  on  power  to  amend  is  ex- 
pressed in  Act  itself 35 

(3)  Implied  limit  even  to  power  of  Govern- 
ment to  amend  charters 36 

(4)  Very  definite  limitation  on  power  of 
Government  to  take  back  property 
from  its  own  grantee 36 

(5)  Certainly  rights  acquired  by  mort- 
gagee and  other  purchasers  cannot  be 
divested  by  ' '  amendment ' '   39 

E. — The  Act  of  Congress  of  1916  is  not  a  valid 
exercise  of  the  power  of  eminent  domain. 

(1)  Act  purports  to  be  only  an  exercise  of 
power  to  amend,  etc 40 

(2)  Lands  are  part  of  territory  of  Oregon.         40 


IV 


PAGE. 

(3)  Purpose  of  Act  is  not  within  powers  of 
Congress  40 

(4)  Lands  are  not  taken  for  a  public  use.  .         41 

(5)  Condemnation    is    warranted    only   by 
public  necessity  or  expediency 43 

(6)  Condemnation  is  not  authorized  for  use 

to  which  lands  already  dedicated 44 

(7)  Compensation  must  be  determined  by 

a  court    44 

(8)  Government  is  not  entitled  to  posses- 
sion until  lands  paid  for 45 

F. — The  language  of  this  Court  in  reference  to  this 
case  (238  U.  S.  393,  411-439)  does  not  furnish 
any  justification  for  the  seizure  of  the  lands  by 
the  Government  or  for  the  destruction  or  im- 
pairment of  the  mortgage. 

(1)  Decision  of  this  Court 45 

(2)  Objects  of  the  land  grant 46 

(3)  Contemplated  "aid"  not  received    "by 
railroad 47 

(4)  Contemplated  settlement  made  impossi- 
ble by  provisos 47 

(5)  This  Court  has  refused  to  enlarge  in 

any  way  the  terms  of  the  provisos ....         48 

(6)  Purpose  of  reference  to  the  Congress.  .         49 

(7)  Scope  of  legislation  which  might  have 
been  anticipated 50 

(8)  Act  as  passed  disregards  rights  of  own- 
er and  mortgagee 51 

(9)  This  court  has  held  that  railroad  has 

full  ownership  not  bare  power  of  sale .  .         51 


PAGE. 
POINT  II. — The  owner  of  these  lands  has  the  unquali* 
tied  right  to  their  use  (including  the  right  to  use 
the  timber  thereon)  at  least  so  far  as  such  use  will 
not  prevent  the  sale  of  the  lands  to  actual  settlers.    52-72 

(1)  Much   of  the   lands   are   not   now  sus- 
ceptible of  cultivation 52 

(2)  Decision  of  this  Court  was  made  with 
knowledge  of  character  of  lands 52 

(3)  Question  as  to  timber;  how  presented 

and  importance  thereof  to  mortgagee.         53 

A.  This  Court  certainly  did  not  decide  that  the 
owner  could  not  use  the  timber,  but,  on  the 
contrary,  intimated  that  it  could  do  so. 

(1)  Comparison  in  parallel  columns  of  lan- 
guage of  Opinion  with  that  of  Decree .  .         55 

(2)  Some  important  variations  between 
Opinion  and  Decree 59 

(3)  The  direction  of  a  permanent  injunc- 
tion against  sale  of  lands,  and  tempo- 
rary injunction  only  against  disposition 
of  lands  and  Umber,  appear  in  sharp 
contrast  in  the  Opinion,  showing  plain- 
ly the  conclusion  of  this  Court  as  to 
right,  in  general,  to  use  of  timber 60 

B. — The  right  of  an  owner  to  use  his  property 
should  not  be  destroyed  in  any  way  or  even 
restricted  except  for  a  most  compelling  reason. 

(1)  If  not  decided  already,  the  right  to 
use  the. timber  follows  necessarily  from 
construction  given  to  the  covenant  and 
the  laws  of  property 62 


VI 


PAGE. 

(2)  Restrictions  upon  use  of  lands  will  not 
be  implied ;  and  here  only  claim  for  re- 
striction is  based  on  the  covenant 62 

(3)  Certainly  the  United  States  has  parted 

with  all  ownership  in  timber 63 

(4)  Granting  Acts  show  recognition  of  the 
value  of  the  timber,  and  make  certain 
express  exceptions,  but  refraim  from 

any  exception  covering  timber 63 

(5)  The  Government  asks  for  extremely 
important  additions  to  terms  of  cove- 
nant; but  this  Court  has  determined 
that  covenant  shall  not  be  added  to  by 
implication   65 

(6)  There  is  no  authority  for  this  conten- 
tion of  the  Government,  which  limits 
property  rights  66 

C. — The  owner,  having  all  the  burdens  and  obliga- 
tions, should  have  all  rights  and  privileges  of 
ownership. 

(1)  Railroad  is  prevented  from  selling 
lands,  and  only  advantage  which  it  can 
derive   is   from  their  use 66 

(2)  Railroad  has  paid  heavy  taxes  and 
all    the    expenses    of    protecting,    etc., 

the  lands    67 

(3)  The  tax  liens  upon  timber  which  it  is 
claimed  can  not  be  used,  are  superior 

to  the  lien  of  the  mortgage 68 


Vll 


PAGE. 

D. — The  main  purpose  of  the  grant  would  be  de- 
feated if  the  railroad  should  be  deprived  of 
the  right  to  use  the  timber  while  it  remains 
the  owner  of  the  lands. 

(1)  Since  the  lands  cannot  be  sold  and 
since  the  burdens  of  the  railroad  have 
been,  and  are,  great,  if  not  allowed 
to  use  lands,  it  will  receive  no  "aid" 

at  all   69 

(2)  Thus  the  main  purpose  of  the  grant  is 
defeated 70 

E. — The  covenant  relating  to  the  sale  of  the  lands 
is  restrictive  only;  the  railroad  is  not  com- 
pelled to  sell  the  lands. 

(1)  This  Court  has  held  that  the  covenant 

is  restrictive 70 

(2)  Even  if  there  is  an  affirmative  obliga- 
tion to  sell  to  settlers,  the  railroad  may 
use  lands  in  any  way  which  will  not  pre- 
vent such  sales 71 

POINT  III. — The  decree  should  not  have  awarded  costs 
against  the  Union  Trust  Company  individually 
and  as  Trustee 72 

CONCLUSION 73 

APPENDIX   A.— ACT   OF  CONGRESS   OF  JUNE   9, 

1916  (FERRIS  ACT) 75 


Vlll 


TABLE     OF     AUTHORITIES     CITED     AND 
REFERRED  TO. 


PAGE. 

Bauman  v.  Ross,  167  U.  S.  548,  598 45 

Bienville  Water  Co.  v.  Mobile,  186  U.  S.  212 37 

Bienville  Water  Co.  v.  Mobile,  186  U.  S.  222 39 

Burke  v.  Southern  Pacific  Co.,  234  U.  S.  669 11 

Burke  v.  Southern  Pacific  Co.,  234  U.  S.  679 63 

Burke  v.  Southern  Pacific  Co.,  234  U.  S.  679-680. . .  11 

Cary  Library  v.  Bliss,  151  Mass.  364 44 

Charles  River  Bridge  v.  Warren  Bridge,  11  Peters 

420,  571  45 

Charles  River  Bridge  v.  Warren  Bridge,  11  Peters 

574   12 

Charles  River  Bridge  v.  Warren  Bridge,  11  Peters 

575   15 

Charles  River  Bridge  v.  Warren  Bridge,  11  Peters 

589-590   11 

Charles  River  Bridge  v.  Warren  Bridge,  11  Peters 

642   41 

Cherokee  Nation  v.  Southern  Kansas  Ry.  Co.,  135 

U.  S.  641-657    40 

Cherokee  Nation  v.  Southern  Kansas  Ry.  Co.,  135 

U.  S.  659 45 

Chicago  B.  &  Q.  R.  R.  v.  Chicago,  166  U.  S.  226, 

235-236 16 

Chicago  B.  &  Q.  R.  R.  v.  Chicago,  166  U.  S.  247- 

248,  251  33 

Chicago   M.  &  St.  P.  Ry.  v.  Wisconsin,  238  U.  S. 

491   37 

Chicago   M.  &  St.  P.  Ry.  v.  Wisconsin,  238  U.  S. 

501   39 

Cleveland  C.  C.  &  St.  L.  Ry.  v.  Drainage  District, 

213  111.  83 41 


IX 


PAGE, 

Cleveland  C.  C.  &  St.  L.  Ry.  v.  Drainage  District, 

213  111.  85 42 

Coke  II  Inst.  272 24 

Cooley:  Constitutional  Law,  p.  345 11 

Cooley:  Constitutional  Law,  p.  350 16 

Cooley:  Constitutional  Law,  p.  351 33 

Cooley:  Constitutional  Law,  p.  375 45 

Cooley:  Constitutional  Limitations,  p.  756 43 

Dartmouth  College  v.  Woodward,  4  Wheaton  518, 

581    24 

Dartmouth  College  v.  Woodward,  4  Wheaton  627.  10 

Davidson  v.  New  Orleans,  96  U.  S.  97,  101 24 

Davidson  v.  New  Orleans,  96  U.  S.  102 19,  20 

Davis  v.  Gray,  83  U.  S.  203,  232 10 

Faraton  v.  Green,  108  No.  Car.  339 66 

Fletcher  v.  Peck,  6  Cranch  87 12 

Fletcher  v.  Peck,  6  Cranch  135 12,  33 

Fletcher  v.  Peck,  6  Cranch  137 10, 11 

Gannon  v.  Peterson,  193  111.  372 66 

Hepburn  v.  Griswold,  8  Wall  603,  623 11 

Hoke  v.  Henderson,  4  Dev.  (N.  C.)  1,  15 24 

Kent's  Commentaries,  Vol.  I,  star,  p.  414 37 

Kohl  v.  United  States,  91  U.  S.  367,  372 40,  41 

Lake  Shore,  etc.,  Ry.  v.  Chicago,  etc.,  Ry.,  97  111. 

506,  512  44 

Legal  Tender  Cases,  12  Wall  457 12 

Miller  v.  Tfte  £We,  15  Wall  478 37 

Miller  v.  The  State,  15  Wall  498 39 

Monongahela  Navigation  Co.  v.  U.  S.,  148  U.  S. 

312,  327  45 

Murray's  Lessee  v.  Hoboken  Land  Co.,  18  Howard 

272   24 


X 


PAGE. 

New  Jersey  v.  Wilson,  7  Cranch  164,  166 10 

Nichols:  Power  of  Eminent  Domain,  Sec.  291 43 

Oregon  &  Cal.  R.  R.  Co.  v.  United  States,  238  U.  S. 

393   1,2,76 

Oregon  &  Cal.  R.  R.  Co.  v.  United  States,  238  U.  S. 

407   3 

Oregon  &  Cal.  R.  R.  Co.  v.  United  States,  238  U.  S. 

408   3,4,47 

Oregon  &  Cal.  R.  R.  Co.  v.  United  States,  238  U.  S. 

410   4 

Oregon  &  Cal.  R.  R.  Co.  v.  United  States,  238  U.  S. 

411-439    45 

Oregon  &  Cal.  R.  R.  Co.  v.  United  States,  238  U.  S. 

418   20 

Oregon  &  Cal.  R.  R.  Co.  v.  United  States,  238  U.  S. 

422   49 

Oregon  &  Cal.  R.  R.  Co.  v.  United  States,  238  U.  S. 

423   48 

Oregon  &  Cal.  R.  R.  Co.  v.  United  States,  238  U.  S. 

432   51,61,65 

Oregon  &  Cal.  R.  R.  Co.  v.  United  States,  238  U.  S. 

434   17,  51,  61,  65 

Oregon  &  Cal.  R.  R.  Co.  v.  United  States,  238  U.  S. 

434-435    20,  22,  26 

Oregon  &  Cal.  R.  R.  Co.  v.  United  States,  238  U.  S. 

435   28,47,49 

Oregon  &  Cal.  R.  R.  Co.  v.  United  States,  238  U.  S. 

436 49 

Oregon  &  Cal.  R.  R.  Co.  v.  United  States,  238  U.  S. 

437-438 30,  53 

Oregon  &  Cal.  R.  R.  Co.  v.  United  States,  238  U.  S. 

438 4,53,55 

Pearsall  v.  Great  Northern  Ry.,  161  U.  S.  646,  673 .  .   33,  34 
People  v.  O'Brien,  111  N.  Y.  1 37 


XI 


PAGE. 

People  v.  O'Brien,  111  N.  Y.  51 33,  34 

Peterson  v.  First  Division,  St.  Paul,  etc.  Ry.,  27 

Minn.  218 67 

Railroad  Land  Co.  v.  Courtwright,  21  Wall  310 . ...  66 
Reeves'  Law  of  Real  Property,  Sec.  243 62 

Schulenburg  v.  Harriman,  21  Wall  44 66 

Sinking  Fund  Cases,  99  U.  S.  700 19,  37 

Sinking  Fund  Cases,  99  U.  S.  718 10,  12,  39 

Sinking  Fund  Cases,  99  U.  S.  719 15,  37,  39 

Sinking  Fund  Cases,  99  U.  S.  718-719 19,  37 

Sinking  Fund  Cases,  99  U.  S.  720 37,  39 

Sinking  Fund  Cases,  99  U.  S.  720-721 37 

Sinking  Fund  Cases,  99  U.  S.  721 38 

Sinking  Fund  Cases,  99  U.  S.  737 24 

State  Bank  v.  Knoop,  16  Howard  369,  380 10 

Story  on  The  Constitution,  Sec.  1956 43,  45 

Stroud  v.  Missouri  River,  etc.,  R.  R.,  4  Dillon  396, 

403 67 

Terrett  v.  Taylor,  9  Cranch  43,  50-51 12, 13 

Terrett  v.  Taylor,  9  Cranch  52 13 

Union  Pacific  R.  R.  v.  United  States,  104  U.  S.  662 .         10 

United  States  v.  Budd,  144  U.  S.  154, 167, 168 67 

United  States  v.  Central  Pacific  Ry.,  118  U.  S.  235 . .  12, 19 
United  States  v.  Central  Pacific  Ry.,  118  U.  S.  238 . .   10, 12 

I  rnited  States  v.  Louglircy,  172  U.  S.  206 66 

United  States  v.  Minn.  &  N.  W.  R.  R.  Co.,  1  Minn. 

127 19, 23 

United  States  v.  Minn.  &  N.  W.  R.  R.  Co.,  1  Minn. 

131 14 

United  States  v.  Minn.  &  N.  W.  R.  R.  Co.,  1  Minn. 

132 11, 14 

United  States  v.  Minn.  &  N.  W.  R.  R.  Co.,  1  Minn. 

132-133 12 


Xll 


PAGE. 

United  States  v.  Minn.  &  N.  W.  R.  R.  Co.,  1  Minn. 

133 18 

United  States  v.  Tennessee  &  Coosa  R.  R.,  176  U. 

S.  242 66 

United  States  v.  Union  Pacific  R,  R.,  91  U.  S.  72 .  . .  10 

United  States  v.  Union  Pacific  R.  R.,  161  U.  S.  1 . . . .  38 
United  States  v.  Union  Pacific  R.  R.,  160  U.  S.  33.  .  37,  38 

United  States  v.  Union  Pacific  R.  R.,  160  U.  S,  33-34  11 

United  States  v.  Union  Pacific  R.  R.,  160  U.  S.  34. .  15 

Washburn  Real  Property,  6th  Ed.,  Sec.  2050 41,  42 

Wilcox  v.  Jackson,  13  Peters  498,  517 17, 40 


No.  492. 


IN  THE 


Supreme  Court  of  the  United  States, 


OCTOBER  TERM,  1916. 


OREGON  &  CALIFORNIA   RAILROAD  COM- 
PANY, a  corporation,  et  al., 

Defendants  and  Appellants, 

against 

UNITED  STATES  OF  AMERICA, 

Appellee. 


BRIEF  FOR  THE  UNION  TRUST  COM- 
PANY OF  NEW  YORK,  DEFEND- 
ANT AND  APPELLANT. 


STATEMENT. 

Prom  the  decree  of  the  District  Court  of  the 
United  States  for  the  District  of  Oregon,  entered 
upon  the  mandate  of  this  Court  which  issued  after 
the  decision  of  this  suit  (reported  238  U.  S.  393- 


439),  an  appeal  was  taken  by  the  defendants  to 
the  United  States  Circuit  Court  of  Appeals  for 
the  Ninth  Circuit,  which,  under  Section  239  of  the 
Judicial  Code,  has  certified  seven  questions  or 
propositions  of  law  to  this  Court.  This  Court  has 
ordered  that  the  whole  record  and  cause  be  sent 
up  to  it  for  its  consideration,  and  the  whole  mat- 
ter therefore  is  now  here  for  decision  in  the  same 
manner  as  if  it  had  been  brought  up  for  review 
by  writ  of  error  or  appeal. 

Since  the  decree  was  entered  an  Act  of  Con- 
gress, commonly  known  as  the  Ferris  Act,  has 
been  passed  (approved  June  9,  1916),  which  the 
Attorney  General  contends  (and  we  concede)  will, 
if  held  valid,  render  "moot  every  specific  question 
presented  by  the  certificate  save  the  question  of 
costs".     (See  Motion  to  advance  the  cause,  p.  12). 

We  shall  therefore  urge  not  only  that  the  de- 
cree is  not  according  to  the  decision  of  this  Court 
or  the  law,  but  also  that  the  said  Act  of  Congress 
is  invalid. 

Land  Grant. 

To  aid  in  the  construction  of  a  railroad  the 
Congress,  by  Acts  of  July  25,  1866  (14  Statutes  at 
Large,  p.  239),  and  May  4,  1870'  (16  Statutes  at 
Large,  p.  94),  made  grants  of  public  lands  in  the 
State  of  Oregon.  By  a  clause  in  an  Act  approved 
April  10,  1869  (16  Statutes  at  Large,  p.  47),  which 
amended  the  said  Act  of  1866  by  enlarg- 
ing the  time  for  beginning  the  work  of  con- 
struction, it  was  provided:  "That  the  lands 
granted  by  the  act  aforesaid  shall  be  sold  to  actual 
settlers  only  in  quantities  not  greater  than  one- 
quarter    section    to    one    purchaser    and    for    a 


price  not  exceeding  two  dollars  and  fifty  cents  per 
acre. ' '  A  clause  in  the  Act  of  1870  provided  that 
the  granted  lands  "shall  be  sold  by  the  Company 
only  to  actual  settlers,  in  quantities  not  exceeding 
one  hundred  and  sixty  acres  or  a  quarter  section 
to  any  one  settler,  and  at  prices  not  exceeding  two 
dollars  and  fifty  cents  per  acre."  The  predeces- 
sor of  the  defendant  Oregon  &  California  Railroad 
Company  accepted  the  grants,  built  a  railroad  in 
accordance  with  its  terms,  and  obtained  patents 
to  most  of  the  lands  thus  granted. 

Mortgage  to  Defendant  Union  Trust  Company. 

Very  little  of  the  granted  lands  were  sold  in  the 
early  days  (238  U.  S.  at  p.  408)  and  the  Railroad 
got  into  financial  difficulties  (238  U.  S.  at  pp.  407, 
435;  Stipulation,  Record  Vol.  4,  p.  1564).  In  1887 
it  mortgaged  all  the  lands  covered  by  the  grants 
(together  with  its  railroad,  etc.)  to  the  defendant 
Union  Trust  Company,  as  Trustee  for  bondhold- 
ers (Ex.  H,  Record,  Vol.  1,  p.  197),  the  money  thus 
obtained  being  used  to  continue  the  construction 
of  the  railroad  and  to  redeem  bonds  which  had 
theretofore  been  issued  to  raise  funds  for  con- 
struction purposes.  (Stipulation,  Record,  Vol.  4, 
p.  1575.)  Many  of  these  bonds  were  negotiated 
and  are  now  held  abroad,  especially  in  Holland 
and  Germany  (Stipulation,  Record  Vol.  4,  pp. 
1574-5). 

Sale  of  Lands. 

After  a  while  some  of  the  granted  lands  were 
sold  in  larger  quantities  and  for  higher  prices  than 
were  specified  in  the  granting  acts  (238  U.  S.  at  p. 


408).  This  was  done  with  the  knowledge  of,  and 
without  any  objection  by,  the  Government  of  the 
United  States  (238  U.  S.  at  p.  410).  The  timber  on 
these  lands  finally  became  valuable,  and,  as 
a  result,  many  persons  sought  to  obtain  the  lands 
not  for  settlement  but  for  the  profits  to  be  de- 
rived from  the  sale  of  the  timber.  (238  U.  S.  at 
p.  438,  Record  Vol.  IV,  pp.  2014-5;  Vol.  VI,  2774.) 

Suit  by  the  United  States  for  a  Forfeiture. 

The  attempts  of  individuals  to  get  possession 
of  the  valuable  timber  for  a  nominal  price  were 
insignificant  compared  with  the  attempt  of  the 
Government  to  obtain  the  lands  without  paying 
anything  whatever.  The  suit  which  it  brought 
was  based  upon  the  claim  that,  because  of  the 
sale  of  some  of  the  lands  contrary  to  the  provisos 
above  referred  to,  the  lands  had  become  forfeited 
to  it.  It  prayed,  therefore,  that  the  court  would 
declare  that  these  lands  belonged  to  it  or,  if  that 
relief  were  denied,  that  a  receiver  should  be  ap- 
pointed to  sell  the  lands  in  accordance  with  the 
provisos  or  that  the  Railroad  should  be  directed 
to  make  the  sales,  etc.,  etc.  (Record,  Vol.  I,  p. 
78-80).  This  court  decided  (we  submit)  that  the 
grant  to  the  railroads  could  not  be  forfeited,  that 
the  provisos  were  covenants,  not  conditions,  and 
that  they  should  be  construed  literally;  and  (since 
the  provisos  as  thus  interpreted  were  harsh  in 
their  operation),  it  enjoined  any  disposition  of 
the  lands  or  timber  until  Congress  should  have  a 
reasonable  time  in  which  to  pass  appropriate 
legislation. 


5 
Decree  Upon  the  Mandate. 

It  having  been  thus  decided  that  the  lands  be- 
longed to  the  Railroad  and  were  not  forfeited  to 
the  Government,  the  Government  proposed  the 
decree  which  was  entered  by  the  District  Court 
(Certificate  of  U.  S.  Cir.  Ct.  of  Appeals,  pp.  13- 
16),  which  decree,  in  effect,  prevents  the  Railroad 
forever  from  using  the  lands  and  deprives  it  for- 
ever of  the  right  to  cut  the  timber  growing  upon 
the  lands. 

Legislation  by  Congress. 

Although  the  Government  had  thus  obtained 
the  entry  of  a  decree  which,  if  valid,  destroyed 
much  of  the  value  of  the  lands  in  the  hands  of  the 
Railroad  and,  although  an  appeal  was  pending 
from  this  decree,  the  Congress  proceeded  to  en- 
act legislation,  intended  to  transfer  to  itself  the 
title  and  all  control  of  the  lands  and  to  enable  the 
Government  to  sell,  first  the  timber  and  after- 
wards the  lands.  The  Ferris  Act,  which  was  ap- 
proved June  9,  1916,  stated,  among  other  recitals, 
that  this  court  had  in  this  suit  ordered  that  the 
Railroad  be  enjoined  "from  making  further  sales 
of  lands  in  violation  of  the  law"  and  further  en- 
joined from  "making  any  sales  whatever  of  either 
the  lands  or  the  timber  thereon  until  Congress 
should  have  a  reasonable  opportunity  to  provide 
for  the  disposition  of  said  lands,  etc.,"  and  en- 
acted that  the  title  of  all  the  lands  be  ' '  revested  in 
the  United  States"  (Sec.  1) ;  that  they  be  divided 
into  three  classes :  power  sites,  timber  lands,  and 
agricultural  lands  (Sec.  2) ;  that  the  timber  should 
be  sold  by  the  Secretary  of  the  Interior  at  such 


6 

times  and  in  such  manner  as  might  seem  best, 
and  that  the  lands  from  which  it  was  removed 
should  thereafter  be  classed  as  agricultural  lands 
(Sec.  4) ;  that  the  lands  classed  as  agricultural 
should  be  subject  to  entry  under  the  homestead 
laws  but  that  patents  should  not  issue  until  the 
lands  had  been  cultivated  for  three  years  (Sec. 
5) ;  that  the  proceeds  of  the  timber  and  the  lands 
should  be  deposited  in  the  Treasury  of  the  United 
States  and  be  paid  to  the  Railroad  or  the  lien 
holders  as  the  fund  accumulated,  and,  that  at  the 
end  of  ten  years,  an  appropriation  should  be  made 
from  the  general  funds  of  the  Treasury  of  the 
United  States  to  pay  any  balance  which  might 
be  due  to  the  Railroad  (Sec.  10) ;  that  the  profits 
derived  from  the  transaction  should  be  paid  one- 
quarter  to  the  State  of  Oregon,  and  one-quarter 
to  the  counties  where  the  lands  were  situated, 
while  one-half  should  be  retained  by  the  Govern- 
ment (Sec.  10). 

[The  Act  referred  to  is  quoted  in  full  in  Ex- 
hibit "A",  annexed  to  this  brief  at  pp.  75^88.] 


ASSIGNMENTS  OF   ERROR. 

The  assignments  of  error  of  the  Union  Trust 
Company,  twenty-eight  in  number,  are  printed  in 
full  in  the  Certificate  of  the  United  States  Circuit 
Court  of  Appeals  to  this  court  at  pages  52  to  62. 
It  seems  unnecessary  to  set  forth  all  of  these  as- 
signments in  this  place,  but  we  print  below  certain 
of  the  assignments  with  a  reference  by  number  to 
other  assignments  which  present  substantially  the 
same  points. 


(As  we  have  said  above,  the  decree  entered  in 
the  District  Court  does  not  raise  moot  questions, 
since  the  Act  of  June  9,  1916,  is  invalid.) 

"23.  The  Court  erred  in  not  making  and 
entering  a  decree  herein  responsive  to  the 
mandate  of  the  Supreme  Court  of  the  United 
States,  without  modification  or  enlargement, 
and  in  the  terms  of  the  opinion  to  which  the 
said  mandate  referred,  and  which  was  expres- 
sive of  the  mandate  itself." 

(See  also  assignments  numbered  1   to  4 
and  22). 

"8.  The  Court  erred  in  its  said  decree  in  in- 
corporating into  and  making  part  of  the  gen- 
eral injunction  therein  injunctive  matter 
touching  the  sale  of  the  timber  on  said  lands, 
except  as  a  part  of  and  in  conjunction  with 
the  land  on  which  the  timber  stands;  and 
touching  the  cutting  or  removal,  or  the 
authorizing  of  the  cutting  or  removal,  of  any 
of  the  timber  thereon,  except  in  connection 
with  the  sale  of  the  land  bearing  such  timber ; 
likewise  touching  the  sale  of  any  mineral  or 
other  deposits  in  said  lands,  except  as  part  of 
and  in  conjunction  with  the  land  in  which  the 
mineral  or  other  deposits  are  found ;  and  also 
touching  the  removal  or  the  authorizing  of 
the  removal  of  mineral  or  other  deposits  in 
said  land,  except  in  connection  with  the  sale 
of  the  land  containing  such  mineral  or  other 
deposits." 

(See    also    assignments    numbered    5    to 

7). 

"15.  The  Court  erred  in  not  holding  and 
decreeing  that  the  railroad  company,  so  long 
as  the  granted  lands  were  not  sold  by  it  but 
remained  unalienated,  had  a  complete  and 
absolute  title  thereto,  and  under  such  circum- 
stances, and  as  the  owner  of  such  a  title,  had 
the  right  to  sell,  cut,  remove,  or  authorize  the 


8 


cutting  or  removal  of  the  timber  thereon; 
and  the  Court  erred  similarly  in  not  so  holding 
and  decreeing  with  reference  to  any  mineral 
or  other  deposits  in  or  products  out  of  said 
lands — subject  to  such  qualification  as  may 
arise  from  the  limited  injunction  referable  to 
the  period  of  six  months,  as  expressed  in  the 
opinion  of  the  Supreme  Court." 

(See   also   assignments   numbered   16  to 
21). 

"24.  The  Court  erred  in  adjudging  and  de- 
creeing that  the  complainant  have  and  recover 
from  the  defendants,  Oregon  and  California 
Railroad  Company,  Southern  Pacific  Com- 
pany, Stephen  T.  Gage,  individually  and  as 
trustee,  and  Union  Trust  Company,  individ- 
ually and  as  trustee,  and  each  of  them,  or  from 
any  or  either  of  them,  any  costs  or  disburse- 
ments herein,  and  in  adjudging  and  decreeing 
that  execution  issue  against  the  said  defend- 
ants or  any  or  either  of  them,  for  any  costs  or 
disbursements  herein." 

(See  also  assignments  numbered  26  and 
27). 


ARGUMENT. 

Position  of  the  Defendant  Union  Trust 
Company,  as  Trustee  of  the 

Mortg"a^e. 

It  is  at  least  probable  that  the  Railroad  could 
not  "have  been  built  if  the  land  grant  had  not  been 
mortgaged.  At  any  rate,  it  has  been  settled  in 
this  case  that  the  use  of  the  lands  to  obtain  credit 
was  contemplated  and  that  the  mortgage  to  the 
Union  Trust  Company  (instead  of  being  a  cause 
for  forfeiture  as  claimed  by  the  Government)  was 


within  the  powers  of  the  Railroad  and  valid,  al- 
though the  interest  of  the  mortgagee  was  sub- 
ject, like  that  of  the  Railroad  itself,  to  the  "re- 
strictions imposed"  upon  sales  by  the  provision 
on  that  subject  contained  in  the  granting  acts. 
Thus  the  Union  Trust  Company,  as  Trustee  of 
the  mortgage,  has  a  prior  claim  or  first  lien  upon 
the  lands  and  their  proceeds  and  it  acts  under  a 
valid  mortgage  in  a  trust  capacity  for  the  bond- 
holders who  partly  upon  the  security  of  these 
lands  contributed  their  money  to  build  the  rail- 
road. 

To  these  bondholders,  many  of  whom  live  in 
Holland  and  Germany,  the  Union  Trust  Company 
is  accountable.  Its  position  is  in  very  large  part 
the  same  as  that  of  the  defendant  railroad,  for 
any  decision  establishing  that  the  railroad  has 
valuable  rights  in  these  lands  will  be  directly  for 
its  benefit;  but  it  contends,  in  addition  and  es- 
pecially, that  even  if  it  is  possible  for  the  Gov- 
ernment now  to  take  away  rights  once  conveyed 
to  the  railroad,  it  cannot  take  them  except  subject 
to  the  lien  of  the  mortgage. 

A  list  of  the  points  urged  by  the  mortgagee  is 
set  forth  in  the  "Subject  Index",  prefixed  to  this 
Brief. 


10 
POINT  I. 

The  Act  of  Congress  of  June  9,  1916, 
is  invalid. 


A. 


The  act  of  June  9,  1916,  is  not  within  the  powers 
given  to  the  Congress  by  the  Constitution. 

1.  The  relation  between  the  Government  and  the 
Railroad  in  reference  to  these  lands  is  contractual. 

As  this  Court  said  in  Davis  v.  Gray,  83  U.  S.  203, 
at  p.  232 : 

''That  the  act  of  incorporation  and  the  land 
grant  here  in  question  were  contracts  is  too 
well  settled  in  this  court  to  require  discus- 
sion."    (Italics  ours.) 

See  also  Fletcher  v.  Peck,  6  Cranch.  87,  at  p.  137. 
New  Jersey  v.  Wilson,  7  Cranch.  164,  at  p. 

166. 
Dartmouth  College  v.  Woodward,  4  Wheat. 

518  at  p.  627. 
State  Bank  v.  Knoop,  16  Howard  369,  at  p. 

380. 
U.  S.  v.  Central  Pac.  Ry.,  118  U.  &.,  235,  at 

p.  238. 

In  the  case  last  cited  (U.  S.  v.  Central  Pac.  Ry.) 
this  Court  said  (p.  238),  referring  to  certain  sec- 
tions quoted  from  several  land  grant  acts,  that 
they  "taken  together  constitute  the  contract  be- 
tween the  United  States  and  the  appellee"  (i.  e., 
Railroad)  and  cited  U.  S.  v.  Union  Pacific  R.  R., 
91  U.  S.  72,  Sinking  Fund  Cases,  99  U.  S.  700, 
718,  Union  Pacific  R.  R.  Co.  v.  U.  8.,  104  U.  S.  662. 


11 

2.  Moreover  the  contract  is  no  longer  executory, 
it  is  executed  (Fletcher  v.  Peck,  6  Cranch.  87,  at  p. 
137).  What  the  Railroad  agreed  to  do  to  earn  the 
grant  has  been  done ;  what  the  Government  sought 
to  obtain,  it  has  obtained;  and  the  price  agreed 
upon  has  been  paid.  The  conveyance  of  the  lands 
to  the  Railroad — for  there  can  be  no  question  that 
the  title  is  in  the  Railroad — was  not  a  gift  but  a 
sale; 

Burke  v.  Southern  Pacific  R.  R.  Co.,  234 
U.  S.  669,  679-80, 

and  the  terms  of  the  granting  acts  which  re- 
main to  be  carried  out  should  therefore  be  con- 
strued according  to  their  fair  meaning. 

U.  S.  v.  Minnesota  &  Northwestern  R.  R. 

Co.,  1  Minn.  127,  at  p.  132. 
Charles  River  Bridge  v.   Warren  Bridge, 

11  Peters  420,  589-90. 

3.  It  is  at  least  doubtful  if  Congress  has  the 
power  to  enact  laws  directly  impairing  the  obliga- 
tions of  contracts  made  between  citizens  or  be- 
tween a  citizen  and  a  State.  Certainly  "it  was 
never  intended  that  Congress  should  exercise  that 
tyrannical  power"  of  impairing  the  obligation  of 
contracts. 

Cooley:  Constitutional  Law,  p.  345. 
Hepburn  v.  Griswold,  8  Wall.  603,  at  p.  623. 
Sinking  Fund  Cases,  99  U.  S.  700,  718, 
U.  S.  v.  Union  Pacific  Ry.  Co.,  160  U.  S.  1, 
at  pp.  33-34. 

4.  However  this  may  be,  where  the  effect  of 
legislation  by  a  government  would  be  to  repudiate 


12 

its  own  contractual  obligation,  or  to  take  back 
property  which  it  has  conveyed  for  a  valid  con- 
sideration, such  legislation  would  be — on  general 
principles — beyond  its  power,  unless  it  were  an 
absolute  despotism. 

(Of  course  the  indirect  lessening  of  the  value  of 
a  contract  by  general  legislation  is  an  entirely 
different  matter — as  has  been  pointed  out  by 
this  court.    Legal  Tender  Cases,  12  Wall.  457.) 

Fletcher  v.  Peck,  6  Cranch.  87,  at  p.  135. 

Terrett  v.  Taylor,  9  Cranch.  43,  50-51. 

U.  S.  v.  Minnesota  &  N.  W.  R.  R.  Co.,  1 

Minn.  127,  132-3. 
Sinking  Fund  Cases,  99  U.  S.  700,  718. 
Charles  River  Bridge  v.  Warren  Bridge,  11 

Peters,  420,  574. 
U.  S.  v.  Central  Pacific  Ry.  Co.,  118  U.  S. 

235. 

In  the  case  last  cited  (U.  S.  v.  Central  Pacific 
Railway  Company)  this  court,  after  stating  (as 
pointed  out  above)  that  sections  in  certain  land 
grant  acts  taken  together  constituted  a  contract 
between  the  United  States  and  the  railroad,  de- 
clared (p.  238) : 

''This  contract  is  binding  on  the  United 
States  and  they  cannot,  without  the  consent 
of  the  company,  change  its  terms  by  any  sub- 
sequent legislation." 

In  Fletcher  v.  Peck,  6  Cranch.  87,  the  State  of 
Georgia  granted  certain  lands  and  one  year  later 
passed  an  act  revoking  the  grant.  Marshall,  C. 
J.,  said  (p.  135)  : 

"Is  the  power  of  the  legislature  competent 
to  the  annihilation  of  such  title  and  to  a  re- 


13 

sumption  of  the  property  thus  held ''.  The 
principle  asserted  is,  that  one  legislature  is 
competent  to  repeal  any  act  which  a  former 
legislature  was  competent  to  pass;  and  that 
one  legislature  cannot  abridge  the  powers  of 
a  succeeding  legislature.  The  correctness  of 
this  principle,  so  far  as  respects  general 
legislation,  can  never  be  controverted.  But, 
if  an  act  be  done  under  a  law,  a  succeeding 
legislature  cannot  undo  it.  The  past  cannot 
be  recalled  by  the  most  absolute  power. 
When,  then,  a  law  is  in  its  nature 
a  contract,  when  absolute  rights  have  vested 
under  that  contract,  a  repeal  of  the  law  can- 
not divest  those  rights;  and  the  act  of  an- 
nulling them,  if  legitimate,  is  rendered  so  by 
a  power  applicable  to  the  case  of  every  indi- 
vidual in  the  community. 

It  may  well  be  doubted,  whether  the  nature 
of  society  and  of  government  does  not  pre- 
scribe some  limits  to  the  legislative  power; 
and  if  any  be  prescribed,  where  are  they  to 
be  found,  if  the  property  of  an  individual, 
fairly  and  honestly  acquired,  may  be  seized 
without  compensation?     *     *     *" 

In   Terrett  v.   Taylor,  9  Cranch.  43,   Story,  J. 
said  (pp.  50-51,  52) : 

"If  the  legislature  possessed  the  authority 
to  make  such  a  grant  and  confirmation,  it  is 
very  clear  to  our  minds  that  it  vested  an  in- 
defeasible and  irrevocable  title.  AYe  have  no 
knowledge  of  any  authority  or  principal 
which  could  support  the  doctrine  that  a  legis- 
lative grant  is  revocable  in  its  own  nature, 
and  held  only  durante  bene  placito.  Such 
a  doctrine  would  uproot  the  very  foun- 
dations of  almost  all  the  land  titles  in 
Virginia,  and  is  utterly  inconsistent  with 
a  great  and  fundamental  principle  of  a 
republican  government,  the  right  of  the 
citizens    to    the    free    enjoyment    of    their 


14 

property      legally     acquired.     *     *  But 

that  the  legislature  can  repeal  statutes 
creating  private  corporations,  or  confirming 
to  their  property  already  acquired  under  the 
faith  of  previous  laws,  and  by  such  appeal 
can  vest  the  property  of  such  corporations  ex- 
clusively in  the  state,  or  dispose  of  the  same  to 
such  purposes  as  they  may  please,  without  the 
consent  or  default  of  the  corporators,  we  are 
not  prepared  to  admit ;  and  we  think  ourselves 
standing  upon  the  principles  of  natural  jus- 
tice, upon  the  fundamental  laws  of  every  free 
government,  upon  the  spirit  and  the  letter  of 
the  constitution  of  the  United  States,  and 
upon  the  decisions  of  most  respectable  judicial 
tribunals,  in  resisting  such  a  doctrine." 

In  U.  8.  v.  Minnesota  &  N.  W.  R.  R.  Co.,  1  Minn. 
127,  the  court  said  (pp.  131,  132)  : 

''An  interest  in  or  right  to  lands,  franchises, 
etc.  once  vested  cannot  be  divested  by  any  act 
of  the  grantor,  unless  by  agreement  of  the 
parties  to  the  grant. 

Every  grant  of  a  franchise  (says  Judge 
Story)  is  necessarily  exclusive,  so  far  as  the 
grant  extends,  and  cannot  be  resumed  or  in- 
terferred  with.  The  Legislature  cannot  re- 
call its  grant  nor  destroy  it.  In  this  respect, 
the  grant  of  a  franchise  does  not  differ  from 
the  grant  of  lands.  In  each  case  the  partic- 
ular franchise  or  particular  land  is  withdrawn 
from  legislative  operation,  and  the  subject 
matter  has  passed  from  the  hands  of  the  gov- 
ernment. ' ' 

"But,  independent  of  the  Constitutional 
provision  referred  to,  the  Repealing  Act  is 
invalid.  There  is  a  principle  inherent  in  the 
nature  of  society,  as  old  as  civil  government 
itself,  which  sets  bounds  to  the  powers  of 
legislation.  It  is  the  principle  which  protects 
the  life,  liberty  and  property  of  the  citizen 


15 

from  violation  in  the  unjust  exercise  of  legis- 
lative powers." 

In  the  Sinking  Fund  Cases,  99  U.  S.  700,  it  was 
said  (p.  719)  : 

"The  United  States  are  as  much  bound  by 
their  contracts  as  individuals.  If  they  re- 
pudiate their  obligations,  it  is  as  much  re- 
pudiation, with  all  the  wrong  and  reproach 
that  term  implies,  as  it  would  be  if  the  re- 
pudiator  had  been  a  State  or  a  municipality  or 
a  citizen.  No  change  can  be  made  in  the  title 
created  by  the  grant  of  the  lands,  or  in  the 
contract  for  the  subsidy  bonds,  without  the 
consent  of  the  corporation.  All  this  is  indis- 
putable."    (Italics  ours.) 

The  above  extract  was  quoted  with  approval  in 
U.  S.  v.  Union  Pac.  Ry.  Co.,  160  U.  S.  1,  34. 

In  Charles  River  Bridge  v.  Warren  Bridge,  11 
Peters  420,  it  was  said  (p.  575)  : 

' '  The  principle  is  admitted  that  the  grantor 
can  do  nothing  that  shall  destroy  his  deed; 
and  this  rule  applies  as  well  to  the  state  as  to 
an  individual.  And  the  same  principle  oper- 
ates with  equal  force  on  all  grants,  whether 
made  by  the  state  or  individuals." 

5.  In  this  country  all  governmental  power  is  not 
vested  in  Congress.  Our  plan  of  government  is 
based  upon  the  conception  that  Congress  shall 
make  laws  of  a  general  character  and  also  may 
make  contracts,  while  to  the  courts  is  entrusted 
the  duty  of  passing  upon  the  rights  of  parties 
under  the  laws  thus  passed  and  the  contracts  thus 
made.  It  has  never  been  contemplated  that  Con- 
gress might  decide  its  own  rights  under  a  con- 
tract by  passing  such  an  act  as  should  properly 


16 

be  embodied  in  the  decree  of  a  court ;  and  certain- 
ly it  cannot  be  tolerated  that  Congress,  after  re- 
ferring to  the  court  the  question  of  its  rights  un- 
der the  contract  in  question  and  after  obtaining 
a  decision,  should  pass  an  act  in  effect  overruling 
that  decision. 

The  rule  is  stated  by  an  eminent  authority  as 
follows : 

"The  legislature  makes  the  laws,  but  can- 
not pass  judgments  or  decrees  or  make  a  law 
that  is  such  in  substance. ' ' 

Cooley:  Constitutional  Law,  p.  350. 

Yet  that  is  precisely  what  has  happened  in  this 
case.  This  Court  has  rendered  its  decision  de- 
clining to  forfeit  the  granted  land  because,  as 
there  had  been  no  violation  of  a  condition  subse- 
quent, the  lands  could  not  legally  be  forfeited; 
and  thereupon,  the  Congress  has  nevertheless 
passed  an  Act  declaring  that  he  lands  are  forfeit- 
ed! 

If  the  course  adopted  in  reference  to  these 
lands  is  available  in  this  case,  it  can  be  followed  in 
all  controversies  to  which  the  Government  is  a 
party.  If  a  decree  of  this  Court  should  be  sat- 
isfactory, it  may  be  allowed  to  stand ;  but  if  not,  it 
will  only  remain  for  the  Congress  to  pass  an  act 
reversing  the  decision  of  this  Court  and  in  effect 
directing  such  judgment  as  it  has  desired. 

In  Chicago,  B.  d  Q.  R.  R.  v.  Chicago,  166  U.  S. 
226,  referring  to  a  statute  which  would  transfer 
certain  property  from  one  person  to  another,  this 
Court  said  (pp.  235-6)  : 

''Such  an  enactment  would  not  receive 
judicial  sanction  in  any  country  having  a 
written  constitution  distributing  the  powers 


17 

of  government  among  three  coordinate  de- 
partments, and  committing  to  the  judiciary, 
expressly  or  by  implication,  authority  to  en- 
force the  provisions  of  such  constitution.  It 
would  be  treated  not  as  an  exertion  of  legis- 
lative power,  but  as  a  sentence — an  act  of 
spoliation.  Due  protection  of  the  rights  of 
property  has  been  regarded  as  a  vital  princi- 
ple of  republican  institutions."  (Italics 
ours.) 

6.  The  power  of  the  Congress  to  pass  laws  is 
limited.  Its  action  is  confined  to  the  express  pow- 
ers given  it  by  the  Constitution  and  to  such  inci- 
dental powers  as  may  be  implied  from  those  ex- 
pressly given.  The  Act  of  June  9,  1916,  cannot  be 
brought  within  the  scope  of  any  of  the  express  or 
implied  powers  of  Congress.  Certainly  this  legis- 
lation cannot  be  upheld  under  Article  IV,  Sec.  3, 
clause  2  of  the  Constitution  giving  Congress  pow- 
er to  make  "regulations  respecting  the  territory 
or  other  property  of  the  United  States."  To  be 
sure  these  lands  were  once  a  part  of  the  public 
domain,  but  long  ago  they  were  conveyed  to  the 
Railroad  for  a  valuable  consideration  and  title  to 
these  lands  in  the  Railroad  is  now  absolute  as  this 
Court  has  held  (238  U.  S.  393,  434).  It  follows 
that  Congress  has  no  more  power  to  legislate  con- 
cerning these  lands,  or  to  confiscate  them,  than  it 
would  have  in  the  case  of  any  other  lands  where- 
ever  situated. 

Wilcox  v.  Jackson,  13  Peters,  498,  517. 

In  U.  S.  v.  Minnesota  &  N.  W.  B.  B.  Co.  (1  Minn. 
127),  the  court  said  (p.  133)  : 

"The  government  of  the  United  States  is 
one  of  limited  powers.     It  is  only  sovereign 


18 

in  a  qualified  sense.  Congress  can  do  what 
the  Constitution  authorizes  it  to  do,  and  no 
more.  Certain  powers  undoubtedly  arise  by 
implication,  but  no  power  can  be  implied  au- 
thorizing the  Legislative  department  to  take 
a  man's  property  without  compensation  and 
without  due  course  of  law.  This  power  is  not 
included  in  any  general  grant  of  legislative 
powers.  A  power  to  do  an  act  which  has  been 
regarded  as  dishonest  among  individuals 
from  time  immemorial  in  all  civilized  coun- 
tries, cannot  be  implied  from  any  of  the 
powers  granted  by  the  Constitution ;  and,  as 
such  a  power  is  not  expressly  given,  it  can- 
not be  exercised." 


B. 


The  Act  of  June  9,  1916,  is  in  violation  of  the  Fifth 
Amendment  of  the  Constitution. 

1.  Except  perhaps  for  the  sake  of  emphasis  it  is 
unnecessary  to  argue  (as  in  "A"  above),  that 
the  Act  in  question  is  beyond  the  powers  conferred 
upon  the  Congress ;  for  the  Congress  is  expressly 
prohibited  from  passing  such  an  Act  by  the  Fifth 
Amendment  to  the  Constitution  which  provides 
that  "no  person  *  *  *  shall  be  deprived  of 
life,  liberty,  or  property  without  due  process  of 
law." 

Under  this  point  we  plan  to  discuss  the  effect 
of  this  prohibition  upon  the  attempt  of  the  Gov- 
ernment to  take  back  to  itself  the  lands  which  have 
been  paid  for  by,  and  conveyed  to,  the  Railroad, 
and  which  have  been  mortgaged  to  the  Union  Trust 
Company.  In  the  following  point  (Point  III, 
infra),  we  shall  refer  to  the  effect  of  this  prohi- 
bition on  the  attempt  to  take  from  the  Union  Trust 


19 

Company  its  vested  rights  under  the  said  mort- 
gage. 

2.  That  the  lands  in  question  belong  to  the  Rail- 
road cannot  be  disputed,  and  that  the  Government 
is  seeking  to  take  them  away,  by  legislative  enact- 
ment, appears  expressly  from  the  terms  of  the  Act 
itself.  Certainly  the  lands  are  property,  and  there 
is  no  distinction  in  principle  between  the  taking- 
back  of  lands  once  owned  by  the  United  States 
and  the  taking  of  lands  derived  from  some  other 
source — except  that  the  former  seems  the  greater 
offense.  While  the  citation  of  authorities  is, 
therefore,  unnecessary,  we  point  to  a  few  de- 
cisions against  the  power  of  Congress  to  seize 
property  the  title  to  which  has  vested  in  its  gran- 
tees. 

Sinking  Fund  Cases,  99  U.  S.  700. 
Davidson  v.  New  Orleans,  96  U.  S.  97,  102. 
United  States  v.    Central    Pacific  Ry.,    118 

U.  S.  235. 
United  States  v.  Minnesota  <&  N.  W.  R.  R. 

Co.,  1  Minn.,  127. 

In  the  Sinking  Fund  Cases  (99  U.  S.  700),  where 
the  question  arose  as  to  the  power  of  the  Con- 
gress to  direct  the  deposit  of  certain  funds  which 
were  to  become  due  from  the  Union  Pacific  Rail- 
road Company  in  the  Treasury  of  the  United 
States  to  secure  the  payment  of  subsidy  bonds  is- 
sued by  the  United  States  in  aid  of  the  railroad, 
this  Court  said  (pp.  718-9)  : 

''The  United  States  cannot,  any  more  than 
a  State,  interfere  with  private  rights,  except 
for  legitimate  governmental  purposes.  They 
are  not  included  within  the  constitutional  pro- 


20 

hibition  which  prevents  States  from  passing 
laws  impairing  the  obligation  of  contracts, 
but,  equally  with  the  States,  they  are  pro- 
hibited from  depriving  persons  or  corpora- 
tions of  property  without  due  process  of  law. 
They  cannot  legislate  back  to  themselves, 
without  making  compensation,  the  lands  they 
have  given  this  corporation  to  aid  in  the  con- 
struction of  its  railroad.  Neither  can  they  by 
legislation  compel  the  corporation  to  dis- 
charge its  obligations  in  respect  to  the  sub- 
sidy bonds  otherwise  than  according  to  the 
terms  of  the  contract  already  made  in  that 
connection." 

In  Davidson  v.  New  Orleans,  above  cited  (96 
U.  S.  97,),  it  was  said  (at  p.  102)  that 

"a  statute  which  declares  in  terms,  and  with- 
out more,  that  the  full  and  exclusive  title  of  a 
described  piece  of  land,  which  is  now  in  A., 
shall  be  and  is  hereby  vested  in  B.,  would,  if 
effectual,  deprive  A.  of  his  property  without 
due  process  of  law,  within  the  meaning  of  the 
constitutional  provision. ' ' 

3.  By  the  strict  and  harsh  terms  of  the  granting 
acts  the  railroad  could  not  sell  the  lands  to  any  one 
other  than  actual  settler,  nor  could  it  sell  in  quan- 
tities exceeding  160  acres  nor  for  a  price  greater 
than  $2.50  an  acre.  But  its  title  was  absolute  and, 
except  for  the  above  qualifications,  it  had  every 
incident  of  ownership.  This  court  in  its  opinion 
in  this  case  referred  to  "the  Government's  ad- 
mission that  there  was  no  obligation  imposed 
upon  the  railroad  to  sell"  (238  U.  S.  at  p.  418), 
and  later  (pp.  434-5),  defined  the  rights  of  the 
railroad  as  follows : 

"There  was  a  complete  and  absolute  grant 
to  the  railroad  company  with  power  to  sell, 


21 

limited  only  as  prescribed,  and  we  agree  with 
the  Government  that  the  company  'might 
choose  the  actual  settler;  might  sell  for  any 
price  not  exceeding  $2.50  an  acre,  might  sell 
in  quantities  of  40,  60  or  100  acres,  or  any 
amount  not  exceeding  160  acres.'  And  we 
add,  it  might  choose  the  time  for  selling  or  its 
use  of  the  grants  as  a  means  of  credit,  subject 
ultimately  to  the  restrictions  imposed." 

4.  Under  the  Act  of  June  9,  1916,  if  valid,  not 
only  is  the  title  to  the  lands  taken  away  from  the 
Railroad;  but  it  is  deprived  of  the  right  to  choose 
the  actual  settlers,  the  right  to  decide  what  quan- 
tity it  will  sell,  and  the  right  to  decide  the  price 
for  which  it  will  sell.  Moreover,  it  is  deprived  of 
the  right  to  choose  the  time  for  selling,  and  is  cut 
off  from  all  opportunity  to  use  the  lands  as  a  basis 
of  credit. 

The  effect  of  the  Act  in  question  might  there- 
fore be  summarized  as  follows : 

Whereas,  in  a  suit  to  which  the  United  States 
was  a  party  it  has  been  adjudged  that  the  title  of 
the  Railroad  to  these  lands  is  absolute,  that  it  may 
use  them  as  a  basis  of  credit,  that  the  only  re- 
striction upon  the  Railroad  is  contained  in  the 
covenant  relating  to  sales,  that,  limited  only  by 
the  terms  of  that  covenant,  the  Railroad  may 
choose  the  actual  settlers  to  whom  it  will  sell,  the 
amounts  of  land  which  it  will  sell,  the  price  it  will 
ask,  and  the  times  for  selling; 

Be  it  enacted  (i.  e.,  adjudged  and  decreed ?)  that 
the  title  of  the  Railroad  is  not  absolute  and  is 
hereby  transferred  to  the  United  States;  that  it 
cannot,  therefore,  be  used  as  a  basis  of  credit; 
that  the  covenant  as  to  sales  shall  not  be  carried 
out;  that  such  sales  as  shall  be  made  shall  be  to 


22 

settlers  chosen  by  the  government,  at  prices  fixed 
by  it  and  at  such  times  as  it  shall  select. 

5.  The  loss  of  the  ability  of  the  Railroad  to  use 
these  lands  as  a  basis  of  credit  in  consequence  of 
this  seizure  by  the  Government  is  a  point  of  im- 
portance. The  right  to  mortgage  the  lands  was 
passed  upon  by  this  court  which  said  (238  U.  S. 
pp.  434-5)  as  stated  above:  "It  might  choose 
the  time  for  selling  or  its  use  of  the  grants 
as  a  means  of  credit.  *  *  *  To  use  the  grant 
for  credit  might  become,  indeed  did  become,  a 
necessity."  It  may  become  necessary  or  at  least 
expedient  for  the  Railroad  to  raise  further  funds, 
or  to  raise  funds  for  the  retirement  of  the  mort- 
gage now  in  force,  by  mortgaging  these  granted 
lands — a  course  from  which  it  is  cut  off  by  the  Act 
in  question. 

6.  It  would  seem  to  be  the  theory  of  the  Act  in 
question — so  far  as  it  is  based  on  any  theory — 
that  the  Railroad  has  only  the  bare  legal  title  to 
these  lands,  that  the  restrictive  covenant  is  the 
only  clause  of  the  granting  act  which  confers  any- 
thing at  all  upon  the  Railroad,  and  that  the  said 
covenant  gives  the  Railroad  only  a  power  of  sale 
without  beneficial  interest. 

We  have  tried  to  point  out  above  that  since  the 
title  is  vested  in  the  railroad  it  cannot  be  taken 
away  by  legislative  act;  and  further,  that  from 
the  plain  meaning  of  the  granting  acts,  as  well  as 
the  decision  of  this  court,  it  appears  that  there  is 
vested  in  the  railroad  not  only  ownership  of  the 
lands  (for  which  it  has  paid  a  full  price)  but  every 
incident  of  ownership — save  as  modified  by  the 
covenant  as  to  sales. 


23 

7.  It  is  not  to  be  supposed  that  the  granting  act 
contemplated  an  immediate  sale  of  the  granted 
lands.  As  soon  as  the  title  to  the  lands  passed  to 
the  railroad  they  became  subject  to  taxation  by 
the  State  and  Local  authorities  (U.  S.  v.  Minn. 
&  N.  W.  R.  R.f  1  Minn.  127) ;  and  they  became  a 
cause  of  other  expenses  and  a  source  of  care  and 
responsibility  to  the  railroad.  Having  thus  all 
the  burdens  of  complete  ownership,  the  railroad 
is,  of  course,  entitled  to  all  the  benefits  of  such 
ownership — except  as  these  may  be  expressly  and 
clearly  cut  down  by  the  covenant  as  to  sales. 
What  these  benefits  may  be,  need  not  be  defined, 
for  that  there  are  benefits  of  ownership  may  be 
assumed.  Without  referring  now  to  the  right  to 
cut  the  timber  (which  will  be  taken  up  below — 
see  Point  II)  the  railroad  would  have  the  right 
so  long  as  the  lands  remained  unsold  to  take 
ice  in  winter  and  fish  and  game  in  summer,  to  use 
the  lands  for  pasturage  and  to  raise  crops,  to 
take  such  timber  and  stone  as  might  be  needed 
for  the  construction  or  maintenance  of  the  rail- 
road, to  build  buildings  upon  the  land,  to  lease 
the  land  as  well  as  buildings,  etc.  Certainly  there 
is  a  vast  difference  and  a  vital  distinction  between 
the  ownership  of  the  land  with  the  rights  incident 
to  such  ownership  and  a  bare  power  to  receive  the 
proceeds  of  the  sales  of  the  lands  when  disposed  of 
by  another  in  his  discretion. 

8.  Moreover,  while  by  the  terms  of  the  granting 
acts  the  railroad  did  not  receive  any  mineral 
lands,  it  did  receive  such  lands  as  contained  coal 
and  iron.  Deposits  of  coal  and  iron  were  not  in- 
tended for  the  use  of  "actual  settlers"  (i.  e.,  agri- 
culturists)  and  the  paramount  purpose  of  these 


24 

grants  was  to  aid  the  railroad.  The  deposits  of 
coal  and  iron,  therefore,  belong  to  the  railroad  and 
cannot  be  taken  from  it  by  the  Act  in  question — 
which  provides  for  the  entry  of  mineral  lands  not 
under  the  homestead  laws  but  under  the  mineral 
laws  of  the  United  States. 

9.  The  claim  should  not  be  made  that  an  Act  of 
Congress  declaring  that  property  which  has  be- 
longed to  a  citizen  shall  thereafter  belong  to  the 
United  States  is  ''due  process  of  law"  as  used  in 
the  Constitution.  This  provision  has  come  down 
to  us  from  Magna  Charta  and  has  always  been 
construed  to  mean  the  law  of  the  land  as  deter- 
mined by  a  court  of  competent  jurisdiction. 

Murray  v.  Hoboken  Land  Co.,  18  Howard 

272- 
Davidson  v.  New  Orleans,  96  U.  S.  97,  101 ; 
Mr.  Webster  in  Dartmouth  College  Case,  4 

Wheat.  518  at  p.  581. 

A  clear  statement  of  the  law  is  contained  in  the 
dissenting  opinion  of  Mr.  Justice  Strong  in  the 
Sinking  Fund  Cases  (99  U.  S.  at  p.  737),  as  fol- 
lows: 

"What  is  due  process  of  law  is  well  under- 
stood. It  is  law  in  regular  course  of  admin- 
istration through  courts  of  justice.  Coke,  2 
Inst.  272;  Murray's  Lessee  v.  The  Hoboken 
Land  and  Improvement  Co.,  18  How.  272.  'The 
terms  "the  law  of  the  land",  said  Chief  Jus- 
tice Euffin  (Hoke  v.  Harderson,  4  Dev.  (N. 
C.)  1),  do  not  mean  merely  an  act  of  the  Gen- 
eral Assembly.  If  they  did,  every  restriction 
upon  legislative  authority  would  be  at  once 
abrogated,  and  private  property  would  be  at 
the  mercv  of  the  legislature.'  p.  15." 


25 

Here,  of  course,  there  has  been  no  semblance  of 
a  "due  process  of  law"  under  which  the  title  to 
these  lands  has  been  taken  away  from  the  rail- 
road and  the  mortgagee.  In  fact  the  most  strik- 
ing feature  of  this  case  is  that  although  there  has 
been  "due  process  of  law",  yet  under  that 
"process"  it  has  been  determined  by  this  Court 
that  the  government  is  not  entitled  to  seize  these 
lands. 


C. 


The  Act  of  June  9,  1916,  is  unconstitutional  be» 
cause  it  cancels  the  lien  of  the  mortgage  to  the  Union 
Trust  Company,  as  trustee  for  bondholders,  and  takes 
away  its  vested  rights  as  trustee  under  said  mortgage. 

1.  We  have  urged  in  the  preceding  point  that,  be- 
cause of  the  Fifth  Amendment  to  the  Constitution, 
the  railroad  cannot  be  divested  of  ownership  in 
the  granted  lands.  But  whatever  theory  may  be 
advanced  in  support  of  a  claim  by  the  Govern- 
ment that  the  lands  may  be  taken  from  the  rail- 
road, it  cannot  meet  our  contention  that  the  rail- 
road, having  the  unquestioned  power  to  do  so, 
has,  by  its  mortgage,  for  a  valuable  consideration, 
conveyed  to  the  Union  Trust  Company,  as  trustee 
for  bondholders,  certain  vested  rights  which  are 
now  sought  to  be,  but  which  cannot  be,  divested 
by  the  Act  in  question. 

Surely  it  will  not  be  claimed  that  the  lands  con- 
veyed by  the  railroad  many  years  ago  to  "actual 
settlers",  in  strict  compliance  with  the  provisions 
of  the  granting  acts,  can  now  be  seized  by  the  Gov- 
ernment.    The  rights  conveyed  to  the  mortgagee 


26 

by  the  mortgage  which  the  railroad  had  power 
to  make  are  just  as  inviolable. 

2.  The  principal  purpose  of  the  Government  in 
making  the  land  grants  was  to  obtain  the  construc- 
tion of  a  railroad  and  an  essential  part  of  that 
purpose  was  the  giving  of  aid  to  the  railroad.  It 
has  been  decided  accordingly,  in  this  very  case, 
that  the  railroad  had  power  to  mortgage  these 
lands.  Moreover  this  court  has  pointed  out  that 
the  use  of  the  grant  for  credit  became  actually 
necessary.     It  said  (238  U.  S.  at  pp.  434-435) : — 

"It  (i.  e.  the  railroad)  might  choose  the 
time  for  selling  or  its  use  of  the  grants  as  a 
means  of  credit,  subject  ultimately  to  the 
restrictions  imposed;  and  we  say  'restrictions 
imposed'  to  reject  the  contention  of  the  rail- 
road company  that  an  implication  of  the  pow- 
er to  mortgage  the  lands  carried  a  right  to 
sell  on  foreclosure  divested  of  the  obligations 
of  the  provisos." 

' '  To  use  the  grant  for  credit  might  become, 
indeed  did  become,  a  necessity.  The  con- 
struction of  the  road  halted  for  funds.  They 
were  raised  by  trust  deeds,  as  we  have  seen." 

3.  The  mortgage  to  the  Union  Trust  Company 
dated  July  1,  1887,  (Exhibit  H,  I  Transcript  of 
Record  197)  is  unquestionably  valid.  (Stipula- 
tion as  to  Facts,  IV  Transcript  of  Record  Items  16- 
18,  pp.  1573-4).  The  bonds  issued  under  it  were 
used  in  large  part  to  retire  the  bonds  issued  under 
earlier  mortgages  for  the  construction  of  the  rail- 
road and  to  provide  additional  funds  for  the  com- 
pletion of  the  railroad.  There  are  $17,745,000  in 
amount  of  these  bonds  still  outstanding.  Most  of 
the  bonds  were  negotiated  abroad  and  are  now 
owned  abroad,  especially  in  Holland  and  Germany. 


(Stipulation  as  to  Facts  IV  Transcript  of  Record, 
Items  19,  20,  21). 

4.  It  may  be  claimed  that,  even  if  the  security  of 
the  lands  is  taken  away,  the  bondholders  will 
eventually  be  paid  in  full  because  of  the  value 
of  the  other  property  of  the  Oregon  &  California 
Railroad  Company  or  because  of  the  guarantee  of 
the  Southern  Pacific  Company.  However  plausi- 
ble this  conjecture  may  seem,  the  fact  remains 
that  the  Congress  has  no  power  to  deprive  the 
bondholders  of  the  security  for  which  they  bar- 
gained, and  to  substitute  another  security  which 
may  be,  in  its  judgment,  equally  good. 

Certainly  if  the  business  of  railroads  generally, 
or  that  of  these  defendant  railroads  in  particular, 
should  become  unprofitable,  the  bondholders 
would  not  be  able  to  collect  their  indebtedness 
without  resorting  to  the  land  grants. 

5.  The  fact  that  the  railroad  owned  the  lands 
would  not,  of  course,  be  sufficient  to  enable  it  to 
raise  money  on  its  mere  promise  to  pay.  To  raise 
funds  for  such  an  enterprise,  it  was  necessary  to 
pledge  the  lands  themselves — to  substitute,  so  to 
speak,  the  obligation  of  the  lands  to  make  repay- 
ment (in  addition  to  the  promise  of  the  railroad), 
in  place  of  the  obligation  of  the  Railroad  Company. 
But  mortgages  invariably  contain,  and  must  neces- 
sarily contain,  the  grant  of  power  to  the  mortgagee 
to  make  the  security  available  in  case  of  default 
in  the  payment  of  principal  or  interest.  Moreover 
in  the  mortgage  of  large  tracts  of  land  like  these 
there  must  be  provisions  preventing  the  sale  of 
the  lands  except  at  prices  satisfactory  to  the  mort- 
gagee, and  insuring  the  deposit  of  the  funds  thus 


28 

realized  with  the  mortgagee  as  a  preliminary  to 
the  release  of  its  lien.  Except  with  such  terms 
a  mortgage  could  not  be  made. 

6.  The  mortgage  to  the  Union  Trust  Company, 
therefore,  conferred  upon  it  the  usual  rights  as 
follows : 

(a)  A  lien  upon  the  lands. 

(b)  The  Right  upon  default  etc.  to  take  posses- 
sion of  the  security. 

(c)  The  right  upon  default  to  sell  the  security  at 
public  auction. 

(d)  The  right  upon  default  to  foreclose,  and  (in- 
cidentally) to  obtain  a  Receiver  and  to  buy  in 
the  property  for  the  bondholders. 

(e)  The  right  to  prevent  private  sales  of  lands 
at  a  sacrifice. 

(f )  The  right  to  receive  the  proceeds  of  sales  be- 
fore releasing  its  lien. 

These  rights  then  were  conveyed  to  the  mort- 
gagee in  trust  for  bondholders  by  the  railroad 
which  had  power  to  convey  them.  Of  course,  as 
this  Court  has  intimated,  no  right  was  conferred 
to  sell  on  foreclosure  "divested  of  the  obligations 
of  the  provisos";  (238  U.  S.  at  p.  435)  but  we 
urge  that,  subject  only  to  the  limitations  con- 
tained in  the  provisos,  the  trustee  has  a  vested 
right  upon  default  to  sell  the  mortgaged  prop- 
erty. 

7.  Having  noticed  some  of  the  rights  secured  to 
the  bondholders  by  the  terms  of  the  mortgage, 
the  effect  of  the  Act  of  June  9,  1916,  upon  these 
rights  should  be  examined. 


29 

In  the  first  place,  the  lien  upon  the  lands  (i.  e. 
the  obligation  of  the  property  itself  to  pay  in 
case  of  default)  without  which  these  bondholders 
would  never  have  advanced  their  money  to  be 
applied  to  the  construction  of  the  road — although 
such  construction  was  sought  by  the  Government 
of  the  United  States — is  taken  away. 

The  right  of  the  mortgagee  upon  default  of  the 
Railroad,  to  sell  the  lands  to  a  purchaser  with  all 
the  powers  conferred  upon  the  railroad  and  thus 
to  obtain  promptly  the  full  value  of  its  lien,  is 
destroyed. 

Moreover  the  right  of  the  mortgagee  in  case  of 
foreclosure  to  buy  in  the  lands  itself  and  to  raise 
funds  for  that  purpose  by  a  new  mortgage  upon 
the  lands — the  ordinary  practice  in  cases  of  re- 
organization— is  taken  away.  It  may  be  sug- 
gested that  this  right  to  continue  to  use  the 
lands  as  a  basis  of  credit  is  not  of  very  great 
value,  in  view  of  the  present  attitude  of  the  Gov- 
ernment; but  that  is  not  the  question.  The 
ability  to  mortgage  these  lands  might  determine 
the  success  or  failure  of  a  plan  of  reorganization 
favorable  to  the  bondholders.  Moreover,  as  a 
guide  to  the  value  of  these  lands  as  a  basis  of 
credit,  it  should  be  noted  that  in  all  probability 
the  present  mortgage  could  not  have  been  obtained 
without  the  pledge  of  these  lands. 

8.  Since  the  Congress  cannot  lawfully  destroy 
the  lien  and  the  vested  rights  of  the  mortgagee, 
it  is  of  comparatively  small  importance  to  in- 
quire what  the  Act  provides  as  a  substitute  for 
the  rights  which  it  seeks  to  destroy.  This  sub- 
stitute, however,  amounts  only  to  an  undertaking 
by    the    Government    (of    course,    unenforcible), 


30 

if  there  should  be  any  proceeds  of  the  sales  of 
these  lands  by  it  during  ten  years,  to  turn  over 
such  proceeds  to  the  mortgagee  ("lien-holder"), 
provided  the  Railroad  consents,  but  otherwise  in 
accordance  with  the  judgment  of  a  court  after  li- 
tigation between  the  railroad  and  lien-holders; 
while  the  balance  which,  according  to  the  compu- 
tation of  the  Government,  may  be  due  at  the  end 
of  ten  years  is  to  be  paid  from  an  appropriation 
by  Congress  which  this  Act  declares  "shall  be 
made  therefor". 

It  should  be  noted  in  this  connection  that  there 
is  good  reason  to  assume  that  very  little  of  these 
lands  are  agricultural  in  character  (238  U.  S.  at 
pp.  437-438).  Moreover,  this  Act  of  1916  provides 
that  no  patent  is  to  issue  to  purchasers  of  these 
lands  until  from  three  to  five  years  after  entry; 
that  some  lands,  whose  character  is  undefined, 
shall  be  withdrawn  from  entry  altogether  for  two 
years;  that  only  such  of  these  lands  as  can  be 
sold  for  $2.50  an  acre  shall  be  thus  disposed  of— 
thus  destroying  the  right  of  the  railroad 
(pledged  to  the  mortgagee)  to  sell  such  lands  at 
less  prices;  that  the  timber  lands  (the  great  bulk 
of  the  lands)  are  not  to  be  disposed  of  until  the 
timber  has  been  removed,  whereupon  they  are  to 
be  given  away;  that  the  Secretary  of  the  Interior 
(in  co-operation  with  the  Secretary  of  Agricul- 
ture etc.)  is  to  sell  the  timber  "at  such  times"  as 
in  his  judgment  will  "produce  the  best  results", 
and  further  that  the  time  of  the  timber  speculator 
to  remove  the  timber  is  not  limited,  but  is  to  be 
fixed  by  the  Secretary  of  the  Interior. 

Thus  it  will  be  seen  that  these  lands  are  not 
to  be  sold  in  accordance  with  the  contract  between 
the  Government  and  the  railroad — a  contract  in 


31 

which  the  mortgagee  has  vested  rights.  Lands 
which  the  railroad  might  wish  to  have  peopled  by 
actual  settlers  at  once,  the  Government  may  never 
open  for  settlement;  lands  which  the  railroad 
might  be  willing  to  sell  for  $1.00  an  acre  to  set- 
tlers of  its  own  choosing,  the  Government  will 
sell  only  for  $2.50  an  acre;  timber  lands,  which  the 
railroad  might  wish  to  sell  for  $2.50  an  acre 
the  Government  proposes  to  give  away.  Above 
all  the  proceeds  of  sales  which,  under  the  mort- 
gage have  to  pass  into  the  hands  of  the  mort- 
gagee before  the  lien  of  the  mortgagee  is  required 
to  be  released,  are  to  go  under  this  Act  into  the 
Treasury  of  the  United  States  free  from  any  lien 
whatever. 

Still  further,  there  can  be  little  doubt  but  that 
the  right  of  the  mortgagee  to  receive  anything  of 
importance  in  satisfaction  of  its  lien  upon  these 
lands  is  likely  to  amount  only  to  the  privilege  of 
urging  upon  the  Congress  of  ten  years  hence,  its 
moral  obligation  to  make  some  sort  of  an  appro- 
priation for  the  mortgagee's  benefit  upon  the  lines 
suggested  in  the  Act  in  question. 

But  if  the  Congress  may  now  take  from  the 
trustee  the  property  and  vested  rights  which  were 
pledged  to  it  as  security,  and  substitute  something 
else,  it  may  ten  years  hence  take  away  all  rights 
under  the  Act  of  1916,  and  substitute  still  other 
alleged  rights  instead.  At  any  rate  against  mere 
non-action  of  the  Congress,  the  mortgagee  will 
have  no  remedy.  Under  this  Act  of  1916  the  Gov- 
ernment is  not  required  to  turn  over  to  the  mort- 
gagee the  full  proceeds  which  may  have  been  re- 
ceived from  the  sale  of  lands  now  subject  to  the 
lien  of  the  mortgage.  The  Act  provides  only  for 
the  payment  of  such  proceeds  lessened  by  large 


32 

sums  claimed  to  have  been  received  by  the  rail- 
road and  which  the  Government  claims  it  has  a 
right  to  offset  against  the  railroad! 

9.  The  provisions  of  Section  8  of  the  Act  of 
1916,  after  all,  go  only  one  step  further.  This  sec- 
tion declares  that  "the  title  to  all  money  arising 
ont  of  said  grant  lands  and  now  on  deposit  to 
await  the  final  outcome  of  said  suit"  (i.  e.  this 
suit)  is  "hereby  vested  in  the  United  States". 
But  this  suit  was  brought  to  decide  whether  the 
lands  belonged  to  the  United  States  or  the  rail- 
road and  it  has  been  decided  that  they  belong  to 
the  railroad;  and  it  would  seem,  therefore,  that 
the  railroad  is  now  entitled  to  receive  such  money, 
or  at  least,  to  have  the  matter  decided  by  the 
Court.  Certainly  such  moneys,  whether  pro- 
ceeds of  sales  of  the  granted  lands  or  of  the  tim- 
ber groiving  thereon  (presumably  sold  with  the 
consent  of  the  Government),  are  subject  to  lien 
of  the  mortgage  of  the  Union  Trust  Company. 

10.  The  rights  of  the  Union  Trust  Company  as 
trustee  for  bondholders  under  the  mortgage  made 
to  it  by  the  railroad  are  vested  rights.  We  have 
said  above  that  if  there  is  anything  which  can  be 
considered  "property"  under  the  Constitution  it 
is  land  granted  by  the  Government  and  for  a  valid 
consideration.  Certainly  if  anything  less  tangi- 
ble than  land  is  to  be  considered  "property"  it  is 
the  vested  rights  of  the  trustee  of  this  mortgage. 
To  it  the  legal  title  to  the  lands  has  been  con- 
veyed, with  (in  substance)  all  the  rights  which  the 
railroad  enjoyed  and  powers  to  take  possession, 
sell,  etc.  Moreover,  for  these  rights  the  bond- 
holders have  paid  $20,000,000  which  has  been  ap- 
plied to  the  construction  of  the  railroad. 


33 

If  any  citation  of  authorities  should  be  neces- 
sary to  establish  that  such  rights  are  " property" 
the  Court  is  referred  to : 

Cooley:  Constitutional  Law,  p.  351. 
Fletcher  v.  Peck,  6  Cranch.  87,  135. 
People  v.  O'Brien,  111  N.  Y.  1,  51. 
Pearsall  v.  Great  Northern  Ry.,  161  U.  S. 

646,    673. 
Chicago  B.  &  Q.  R.  R.  Co.  v.  Chicago,  166 

U.  S.  226,  247-248,  251. 

"The  test  of  unlawful  interference  with 
property  is  that  vested  rights  are  abridged 
or  taken  away.  Rights  are  vested,  in  con- 
tradistinction to  being  expectant  or  contin- 
gent. They  are  vested  when  the  right  to  en- 
joyment, present  or  prospective,  has  become 
the  property  of  some  particular  person  or 
persons  as  a  present  interest." 

Cooley:  Constitutional  Law,  p.  351. 

In  Fletcher  v.  Peck,  6  Cranch,  87,  this  Court 
said  (p.  135)  :— 

' '  But,  if  an  act  be  done  under  a  law,  a  suc- 
ceeding legislature  cannot  undo  it.  The  past 
cannot  be  recalled  by  the  most  absolute  power. 
Conveyances  have  been  made;  those  convey- 
ances have  vested  legal  estates,  and,  if  those 
estates  may  be  siezed  by  the  sovereign  au- 
thority, stiil,  that  they  originally  vested  is  a 
fact,  and  cannot  cease  to  be  a  fact. 

When,  then,  a  law  is  in  its  nature  a  contract, 
when  absolute  rights  have  vested  under  that 
contract,  a  repeal  of  the  law  cannot  divest 
those  rights;  and  the  act  of  annulling  them, 
if  legitimate,  is  rendered  so  by  a  power  ap- 
plicable to  the  case  of  every  individual  in  the 
community. 


34 

In  People  v.  O'Brien,  111  N.  Y.  1,  the  court  said 
(P-  51)  : 

''If  it  is  possible  to  conceive  the  idea  of  a 
repealable  grant,  certainly  such  a  grant,  ac- 
companied with  power  to  convey  or  pledge 
the  interest  granted,  must,  on  the  execution 
of  the  power,  necessarily  preclude  a  resump- 
tion by  the  grantor  of  the  subject  of  the  grant, 
or  any  right  of  property  acquired  under  it. 
An  express  reservation  by  the  legislature  of 
power  to  take  away  or  destroy  property  law- 
fully acquired  or  created  would  necessarily 
violate  the  fundamental  law,  and  it  is  equally 
clear  that  any  legislation  which  authorizes 
such  a  result  to  be  accomplished  indirectly, 
would  be  equally  ineffectual  and  void." 

In  Pearsall  v.  Great  Northern  Ry.  Co.,  161  U.  S. 
646,  this  Court — speaking  of  vested  rights — said 
(p.  673): 

"As  applied  to  railroad  corporations,  it 
may  reasonably  be  contended  that  the  term 
extends  to  all  rights  of  property  acquired  by 
executed  contracts,  as  well  as  to  all  such 
rights  as  are  necessary  to  the  full  and  com- 
plete enjoyment  of  the  original  grant,  or  of 
property  legally  acquired  subsequent  to  such 
grant. ' ' 

11.  By  way  of  a  summary,  we  urge  that  the  mort- 
gage is  unquestionably  a  valid  contract  between 
the  railroad  and  the  bondholders;  that  this  con- 
tract was  one  which  the  railroad  had  power  to 
make  and  which  did  not  contravene  the  terms  of 
the  land  grants;  that  for  the  obligations  of  the 
mortgage  contract  the  bondholders  gave  valuable 
consideration ;  and  that  the  property  rights  which 
they  thus  acquired  are  as  inviolable  as  it  is  pos- 
sible for  any  rights  in  property  to  be. 


35 
D. 


The  taking  of  the  lands  by  the  Government  and 
the  cancellation  of  the  lien  and  other  rights  secured 
to  the  Union  Trust  Company  by  the  mortgage  cannot 
be  supported  under  the  reservation  contained  in  the 
Act  of  July  25,  1866,  to  alter,  amend,  etc. 

1.  The  twelfth  section  of  the  land  grant  Act  of 
July  25,  1866,  reads  as  follows:  "That  Congress 
may  at  any  time,  having  due  regard  for  the  rights 
of  the  said  Oregon  &  California  Railroad  Com- 
panies, add  to,  alter,  amend  or  repeal  this  act." 

This  section  is  stated  in  one  of  the  several  re- 
citals of  the  Act  of  June  9, 1916 ;  but  that  it  was  not 
put  forward  seriously  as  authorizing  such  legisla- 
tion appears  sufficiently  from  the  fact  that  that  Act 
seeks  to  take  back  the  lands  received  under  the 
Act  of  May  4,  1870  (the  West  Side  Grant)  al- 
though the  latter  act  contained  no  such  clause! 
The  lands  received  under  this  West  Side  Grant 
which  remained  unsold  at  the  time  this  suit  was 
brought  amounted  to  68,682  acres  (Record,  Vol. 
I,  pp.  273,  508). 

2.  Since  the  Act  of  July  25,  1866  expressly  pro- 
vided that  the  power  to  alter,  amend,  etc.,  should 
be  exercised  only  with  "due  regard  for  the  rights 
of  the  Oregon  &  California  Railroad  Companies," 
it  is  hardly  necessary  to  point  out  the  limitations 
upon  the  exercise  of  such  powers  which  are  nec- 
essarily implied.  These  rights  of  the  railroad 
have  been  conveyed  to  the  mortgagee  (See  "C" 
above)  and  these  rights  by  the  very  terms  of  the 
granting  act  cannot  be  taken  away. 


36 


3.  Most  of  the  cases  relating  to  the  implied  limi- 
tations upon  the  reserved  power  of  a  legislature 
to  "alter,  amend,"  etc.,  relate  to  the  amendments 
of  charters  of  corporations.  In  such  cases  the 
question  is  only  as  to  the  right  of  a  legislature  to 
alter  the  privileges  which  it  has  conferred  upon, 
and  the  rules  which  it  has  made  for  the  control 
of,  one  of  its  own  creatures.  Yet,  even  in  such 
cases,  it  is  well  settled  that  the  legislature  cannot, 
under  the  guise  of  amending  a  charter,  pass  an 
act  which  will  deprive  the  corporation  of  its  prop- 
erty without  due  process  of  law,  or  take  away 
vested  rights. 

4.  Here  we  are  not  concerned  with  an  amend- 
ment of  a  charter;  for  the  charter  of  the  Oregon 
and  California  Railroad  was  granted  by  the  State 
of  Oregon. 

The  power  reserved  is  contained  in  the  Act  of 
July  25,  1866  by  which  the  United  States  conveyed 
lands  to  the  Railroad  for  a  good  consideration. 
Some  of  these  lands  have  been  sold  strictly  within 
the  terms  of  the  provisos  of  the  granting  act,  and 
all  the  lands  now  owned  by  the  Railroad  have  been 
mortgaged  to  the  Union  Trust  Company  as  trus- 
tee for  the  bondholders. 

Whatever  may  be  the  rule  as  to  the  amendment 
of  charters,  it  is  perfectly  well  settled  that  the 
power  reserved  in  a  granting  act  to  "alter, 
amend,"  etc.,  is  subject  to  certain  well  settled 
restrictions.  Assuredly  Congress  cannot,  in  the 
form  of  an  amendment,  deprive  its  grantee  of 
his  property  without  due  process  of  law,  nor  can 
it  take  vested  rights  away  from  its  grantee, 
nor — above  all — can  it  take  away  the  vested 
rights  of  third  persons  who  have  dealt  in  good 


37 

faith  with  the  grantee  and  have  parted  with  a 
valuable  consideration  to  acquire  such  rights. 

Such  power,  at  least  if  applied  to  the  rights  ac- 
quired by  third  parties  before  the  amendment, 
would  amount  to  a  power  to  nullify  the  constitu- 
tional guarantees  which  protect  property  rights. 

Sinking  Fund  Cases,  99  U.  S.   700,   718-19, 

720-1. 
U.  S.  v.    Union  Pacific  Uy.   Co.,   160  U.  S. 

1,  33. 
Bienville   Water  Co.   v.   Mobile,   186  U.  S. 

212. 
Chicago,  M.  &  St.  P.  R.  R.  Co.  v.  Wisconsin, 

238  U.  S.  491. 
People  v.  O'Brien,  111  N.  Y.  1    (and   cases 

cited). 
1  Kent's  Commentaries,  star.  p.  414. 
Miller  v.  The  State,  15  Wall.  478. 

In  the  Sinking  Fund  Cases,  99  U.  S.  700  (cited 
above)  the  Act  incorporating  the  Union  Pacific 
Railway  Company  and  granting  lands  to  it  to  aid 
in  the  construction  of  its  road,  contained  a  reser- 
vation of  power  to  "alter,  amend",  etc.,  substan- 
tially as  in  the  Act  of  1866  granting  lands  to  the 
Oregon  &  California  Railroad  Company.  Speak- 
ing of  the  power  of  Congress  under  that  reserva- 
tion, this  Court  said  (p.  720) : 

"That  this  power  has  a  limit,  no  one  can 
doubt.  All  agree  that  it  cannot  be  used  to 
take  away  property  already  acquired  under 
the  operation  of  the  charter,  or  to  deprive  the 
Corporation  of  the  fruits  actually  reduced 
to    possession   of   contracts    lawfully   made; 


38 

Again  the  Court  said  (p.  721) : 

"In  so  doing  it  cannot  undo  what  has  al- 
ready been  done,  and  it  cannot  unmake  con- 
tracts that  have  already  been  made,  but  it 
may  provide  for  what  shall  be  done  in  the 
future,  and  may  direct  what  preparation 
shall  be  made  for  the  due  performance  of 
contracts  already  entered  into.  It  might 
originally  have  prohibited  the  borrowing  of* 
money  on  mortgage,  or  it  might  have  said 
that  no  bonded  debt  should  be  created  with- 
out ample  provision  by  sinking  fund  to  meet 
it  at  maturity.  Not  having  done  so  at  first, 
it  cannot  now  by  direct  legislation  vacate 
mortgages  already  made  under  the  poivers 
originally  granted,  nor  release  debts  already 
contracted.  A  prohibition  now  against  con- 
tracting debts  will  not  avoid  debts  already 
incurred.  An  amendment  making  it  unlaw- 
ful to  issue  bonds  payable  at  a  distant  day, 
without  at  the  same  time  establishing  a  fund 
for  their  ultimate  redemption,  will  not  in- 
validate a  bond  already  out.  All  such  legis- 
lation will  be  confined  in  its  operation  to  the 
future."     (Italics  ours.) 

In  United  States  v.  Union  Pacific  Railway  Co., 
160  U.  S.  1  (cited  above)  a  case  involving  the 
amendment  of  a  charter  contained  in  a  statute 
granting  lands  to  the  Railroad  by  the  United 
States,  Mr.  Justice  Harlan,  delivering  the  opinion 
of  this  Court  said  (p.  33)  : 

"It  would  not  be  competent  for  Congress, 
under  the  guise  of  altering  and  amending  the 
act  in  question,  to  impose  upon  the  railroad 
company  duties  wholly  foreign  to  the  objects 
for  which  it  was  created  or  for  which  the 
governmental  aid  was  given.  Neither  could 
it,  by  such  alteration  or  amendment,  destroy 
rights  actually  vested,  nor  disturb  transac- 
tions fully  consummated.    We  may  here,  not 


39 

inappropriately,  repeat  what  was  said  in  the 
Sinking  Fund  Cases,  99  U.  S.  700,  718,  719, 
720", 

continuing  with  quotations  from  the  Sinking  Fund 
Cases,  set  forth  above  (pp.  19-20  of  this  brief.) 

In  writing  the  opinion  of  this  court  in  Bienville 
Water  Co.  v.  Mobile,  186  U.  S.  212  (cited  above), 
Mr.  Justice  Brewer  said  (p.  222)  : 

"It  has  been  held  that  the  right  of  revoca- 
tion or  amendment  carries  with  it  no  right  to 
appropriate  the  tangible  property  belonging 
to  the  corporation." 

In  the  recent  case  of  Chicago  M.  &  St.  P.  R.  B. 
Co.  v.  Wisconsin,  238  U.  S.  491  (cited  above),  Mr. 
Justice  Lamar,  writing  the  opinion  of  this  court, 
referred  (p.  501)  to  two  decisions  of  the  Wiscon- 
son  court  where  it  was  held  that  "the  right  to 
amend  a  charter  does  not  authorize  the  taking  of 
the  company's  property  without  just  compensa- 
tion", and  added:  "The  same  view  has  been 
repeatedly  expressed  in  the  decisions  of  this 
court. ' ' 

In  Miller  v.  The  State,  15  Wall.  478  (cited 
above),  it  was  said  by  Mr.  Justice  Clifford  (p. 
498): 

"Power  to  legislate,  founded  upon  such  a 
reservation  in  a  charter  to  a  private  corpora- 
tion, is  certainly  not  without  limit,  and  it  may 
well  be  admitted  that  it  cannot  be  exercised 
to  take  away  or  destroy  rights  acquired  by 
virtue  of  such  a  charter,  and  which  by  a  legiti- 
mate use  of  the  powers  granted  have  become 
vested  in  the  corporation     .     .     ." 

5.  The  point,  however,  upon  which  the  defend- 
ant Union  Trust  Company,  as  trustee  for  bond- 


40 

holders,  wishes  to  lay  the  very  greatest  stress  is 
that,  whatever  may  be  done  by  the  Congress  in  the 
direction  of  altering  or  amending  the  granting 
acts,  it  cannot,  by  amendment,  take  away  from 
purchasers  the  lands  conveyed  to  them  by  the  rail- 
road in  compliance  with  the  provisos  in  the 
grants;  nor  can  Congress,  for  exactly  the  same 
reasons,  by  an  amendment  take  away  the  lien  of 
the  mortgagee  or  the  rights  conferred  upon  it  by 
the  mortgage. 

[See  quotation  from  the  Sinking  Fund  Cases  on 
page  38  above.] 


E. 

The  Act  of  Congress  of  1916  is  not  a  valid  exercise 
of  the  power  of  eminent  domain. 

1.  The  Act  in  question  is  entitled  "An  Act  to 
alter  and  amend"  the  granting  acts  and  does  not 
purport  to  be,  and  therefore  should  not  be  con- 
strued as,  an  attempted  exercise  of  the  power  of 
eminent  domain. 

2.  Moreover,  the  lands  sought  to  be  seized  are 
the  property  of  a  corporation  organized  under  the 
laws  of  the  State  of  Oregon  and  are  a  part  of  the 
territory  of  Oregon,  and  the  power  to  legislate  con- 
cerning them  is  vested  in  that  state. 

Wilcox  v.  Jackson,  13  Peters,  498,  517. 

3.  At  any  rate  the  Government  of  the  United 
States  can  only  take  them  "for  such  objects  as 
are  germane  to  the  execution  of  powers  granted 
to  it"  (Cherokee  Nation  v.  Kansas  Railway  Co., 
135  U.  S.  641,  657;  Kohl  v.  United  States,  91  U.  S. 


41 

367,  372).  To  seize  and  sell  the  timber  for  its 
own  profit  and  the  division  of  the  lands  among 
farmers  of  its  own  choosing  is  not  within  any  of 
the  powers  of  Congress;  for  these  are  no  longer 
public  lands. 

4.  The  most  decisive  answer  to  any  claim  that 
the  Act  of  1916  can  be  considered  as  an  exercise  of 
the  power  of  eminent  domain,  lies  in  the  provis- 
ions of  the  Constitution,  and  in  the  fact  that  the 
seizure  of  these  lands  is  not  for  a  public  use. 

The  Fifth  Amendment  to  the  Constitution  after 
providing  that  no  person  shall  be  deprived  of  his 
property  without  due  process  of  law  (that  is  to 
say  in  accordance  with  the  law  of  the  land  as  de- 
fined by  the  Courts)  goes  on  to  state  the  only  case 
where  private  property  may  be  seized  by  the  State 
as  follows:  "Nor  shall  private  property  be  taken 
for  public  use  without  just  compensation." 

Although  not  stated  expressly,  this  clause  has 
always  been  held  to  mean  that  private  property 
shall  not  be  taken  for  any  purpose  which  is  not 
a  public  purpose. 

Charles  River  Bridge  v.  Warren  Bridge,  11 

Peters  420,  642.  " 
Cleveland  C.  C.  &  St.  L.  Ry.  v.  Drainage 

Dist.,  213  HI.  83. 
Washburn  Real  Property,  6th  Ed.  Sec.  2050. 

In  Charles  River  Bridge  v.  Warren  Bridge,  11 
Peters  420,  McLean,  J.,  made  the  statement  fre- 
quently quoted  (p.  642)  : 

"Although  the  sovereign  power  in  free 
governments  may  appropriate  all  the  prop- 
erty public  as  well  as  private  for  public  pur- 
poses making  compensation  therefor,  yet  it 


42 

has  never  been  understood,  at  least,  never  in 
our  republic,  that  the  sovereign  power  can 
take  the  private  property  of  A  and  give  it  to 
B  by  the  right  of  '  eminent  domain '  or,  that  it 
can  take  it  at  all  except  for  public  purposes, 
or  that  it  can  take  it  for  public  purposes  with- 
out the  duty  and  responsibility  of  making 
compensation  for  the  sacrifice  of  the  private 
property  of  one,  for  the  good  of  the  whole." 

In  Cleveland,  C.  C.  &  St.  L.  Ry.  v.  Drainage 
Dist.,  213  111.  83,  cited  above,  it  was  said  (p.  85)  : 

''Private  property  cannot  be  condemned  by 
a  person  or  corporation  on  the  ground  that 
general  prosperity  of  the  state  or  commun- 
ity would  be  promoted  thereby,  if  the  title 
to  the  property  so  taken  is  to  be  vested  in 
such  person  or  corporation  as  private  prop- 
erty, to  be  used  and  controlled  as  other  prop- 
erty. ' ' 

Washburn,  in  his  book  on  Real  Property  (Sec. 
2050  cited  above),  speaking  of  the  right  of  emi- 
nent domain,  says : 

"But  this  power  does  not  imply  any  right 
on  the  part  of  the  State  to  take  the  property 
of  one  citizen  and  give  it  to  another,  whether 
with  or  without  compensation." 

Here  plainly  the  lands  are  not  taken  for  a  pub- 
lic purpose,  and  we  believe  that  no  case  can  be 
found  in  the  books  which  would  justify  a  claim 
that  the  proposed  taking  is  for  a  public  use. 

An  important  purpose  of  the  Act  is  obviously 
to  enable  the  Government  to  raise  a  large  sum 
from  the  sale  of  timber,  keeping  half  for  its  own 
use  and  dividing  the  other  half  between  the  State 
and  several  of  the  Counties  of  Oregon.  This,  in  a 
sense,  might  be  said  to  be  for  the  public  or  at  least 


43 

for  local  benefit,  for  the  money  will  be  used  to  pay 
expenses  of  government.  But,  regarded  in  this 
light,  the  Act  of  1916  amounts  plainly  to  illegal 
taxation. 

The  lands  themselves  will  come  eventually 
into  the  ownership  of  private  individuals;  but 
that  is  exactly  what  the  Constitution  prohibits. 
It  is  the  taking  of  the  private  property  of  A 
for  the  purpose  of  turning  it  over  (to  be  used 
as  private  propert}r)  to  B.  To  be  sure,  all  of  the 
property  of  the  Oregon  &  California  B.  R.  Co.  is 
not  to  be  given  to  one  individual — probably  it  will 
be  distributed  to  many  private  persons — but  the 
cutting  up  of  the  property  makes  no  difference  in 
principle. 

5.  To  justify  the  seizure  of  lands  under  the  tre- 
mendous power  of  eminent  domain,  there  must  be 
a  public  necessity  or  expediency  for  such  a  course. 
Otherwise  the  seizure  is  invalid. 

Nichols :  The  Power  of   Eminent    Domain, 

Sec.  291. 
Story  on  the  Constitution,  Sec.  1956. 
Cooley:  Constitution  Limitations,  p.  756. 

Here  there  is  no  necessity  whatever  for  the 
seizure  of  the  lands  except  to  enable  the  Govern- 
ment to  sell  the  timber  for  its  own  profit.  As  for 
the  division  of  the  land  among  actual  settlers — 
perhaps  a  duty  imposed  by  the  granting  acts,  but 
certainly  the  right  of  the  railroad — that  object,  in 
so  far  as  it  can  be  carried  out  at  all,  may  be  ef- 
fected by  the  railroad,  the  owner  of  the  lands,  pos- 
sibly under  the  direction  of  the  Court,  possibly 
even  subject  to  the  directions  of  the  Congress. 
Seizure  of  the  lands  by  the  Government  can  only 


44 

be  desired  therefore  in  order  to  enable  the  Gov- 
ernment to  dispose  of  the  lands  contrary  to  the 
terms  of  its  contract  with  the  railroad! 

6.  It  is  perhaps  only  as  a  corollary  to  the  rule 
just  referred  to — that  private  property  cannot  be 
seized  even  for  a  public  purpose  unless  such  a 
course  is  necessary — that  the  courts  have  held 
that  private  property  cannot  be  taken  by  con- 
demnation to  be  used  for  a  purpose  to  which  it 
has  been  dedicated  already.  It  amounts  merely 
to  the  transfer  of  property  from  one  party  to 
another. 

Gary  Library  v.  Bliss,  151  Mass.  364. 
Lake  Shore  etc.  Ry.  v.  Chicago  etc.  Ry.,  97 
111.  506,  512. 

The  Act  in  question  attempts  to  take  lands  from 
the  Railroad  for  the  purpose  (among  others)  of 
enabling  the  Government  to  sell  it  to  actual 
settlers — in  other  words,  what  the  Railroad  might 
otherwise  do  itself. 

7.  That  the  Act  in  question  was  not  intended  as 
an  exercise  of  the  power  of  eminent  domain  ap- 
pears further  from  the  fact  that  no  provision  is 
made  for  the  ascertainment  of  the  "just  compen- 
sation" required  by  the  Constitution.  It  is  not  a 
function  of  the  legislative  branch  of  the  Govern- 
ment to  fix  the  amount  of  compensation  due  to  the 
owner  of  property  taken  for  governmental  pur- 
poses. 

Monongahela  Nav.  Co.  v.  U.  S.,  148  U.  S. 

312,  327. 
Story:  The  Constitution,  Sec.  1956. 


45 

This  question  must  be  determined  by  an  impar- 
tial tribunal  which  will  give  the  owner  of  the  prop- 
erty taken  a  chance  to  be  heard. 

Cooley:  Constitutional  Law,  p.  375. 
Monongahela  Nav.  Co.  v.  U.  S.,  supra, 
Charles  River  Bridge  v.  Warren  Bridge,  11 
Peters,  420,  571. 

"Just  compensation"  means  of  course  the  fair 
value  of  the  property  taken;  and  that  the  mort- 
gagee does  not  accept  the  opinion  of  the  Congress 
respecting  the  value  of  these  lands  appears  suf- 
ficiently in  the  earlier  parts  of  this  brief. 

8.  By  the  terms  of  the  Act  in  question,  the  title 
to  the  lands  is  vested  at  once  in  the  United  States, 
although  the  assumed  value  may  not  be  paid  for 
many  years.  It  has  been  held  that  compensation 
must  be  made  within  a  reasonable  time,  and  that 
"the  United  States  are  not  entitled  to  possession 
of  the  land  until  the  damages  have  been  assessed 
and  actually  paid." 

Bauman  v.  Ross,  167  U.  S.  548,  598. 
Cherokee  Nation  v.  Southern  Kansas  Ry. 
Co.,  135  U.  S.  641,  659. 


F. 


The  language  of  this  Court  in  reference  to  this 
case  (238  U.  S.  393,  411=439)  does  not  furnish  any 
justification  for  the  seizure  of  the  lands  by  the  Gov- 
ernment or  for  the  destruction  or  impairment  of  the 
mortgage. 

1.  The  question  presented  to  this  Court  when 
this   case   was   argued  before   was   whether   the 


46 

provisos  in  the  granting  acts  were  conditions  sub- 
sequent, for  the  breach  of  which  the  grants  could 
be  forfeited,  or  only  covenants.  This  court  de- 
cided that  the  provisos  were  restrictive  cove- 
nants and  stated  that  they  applied  to  all  the  lands 
whether  capable  of  settlement  or  not.  That  was 
as  far  as  this  court  could  go ;  but  from  its  examina- 
tion of  the  case  it  must  have  become  apparent  that 
here  was  a  situation  of  great  hardship,  affecting 
not  only  the  railroad  but  the  United  States  as  well, 
and  that  the  way  it  should  be  remedied,  and  per- 
haps the  only  way  it  could  be  remedied,  was  by  the 
action  of  Congress.  It  therefore  enjoined  (tem- 
porarily) any  changes  in  the  property  and  com- 
mended the  situation  to  Congress.  It  seems  need- 
less to  add  that,  under  the  circumstances  (which 
will  be  referred  to  below)  there  was  every  reason 
to  suppose  that  Congress,  while  perhaps  accom- 
plishing certain  purposes  for  the  benefit  of  the  na- 
tion, would  relieve  the  situation  of  the  railroad 
and  the  mortgagee.  Certainly  there  was  no  reason 
to  expect  that  the  Congress  would,  by  way  of  rem- 
edial legislation,  confiscate  the  lands  and  destroy 
the  lien  of  the  mortgage  and  the  rights  which  had 
vested  thereunder. 

2.  In  making  the  land  grant  the  Government  (1) 
intended  to  give  very  substantial  aid  to  the  rail- 
road in  order  that  it  might  (2)  obtain  a  railroad 
which  would  benefit  the  nation  and  carry  its  mails, 
supplies,  troops,  etc.,  and  (3)  that  it  might,  inci- 
dentally, get  the  lands  settled  and  cultivated.  The 
railroad  on  the  other  hand  expected  (1)  to  receive 
very  substantial  aid  from  the  lands  and  (2)  with 
that  aid  to  build  its  road  and  (3)  get  the  lands  in 


47 


the  neighborhood  of  its    road    settled    and    culti- 
vated. 

3.  As  a  matter  of  fact  when  the  railroad  came 
to  patent  its  lands  all  the  good  lands  in  the  valleys 
had  been  taken  up  already  (Defendant's  Ex.  258, 
Record,  Vol.  13,  6691;  Ex.  259,  Record,  Vol.  13, 
p.  6698)  ;  and  the  lands  which  it  obtained  were 
in  the  main  covered  with  timber  and  unfit  for  set- 
tlement. (Record,  Vol.  IV,  2010,  1946,  1947;  Ex. 
260,  Vol.  XIII,  6696).  Some  lands  were  sold  prior 
to  1887,  but  they  were  small  in  amount  (238  U.  S. 
at  p.  408).  However,  by  mortgages  covering  these 
lands  and  especially  by  the  mortgage  to  the  Union 
Trust  Company  in  1887,  funds  were  obtained  for 
the  completion  of  the  road  (238  U.  S.  at  p.  435; 
Stipulation  Item  21,  Record,  Vol.  IV,  p.  1575). 

Thus  the  great  end  desired  by  the  Government 
was  obtained;  but  the  anticipated  "aid"  to  the 
railroad  had  not  been  given.  In  later  years  some 
of  the  timber  lands  were  sold  in  rather  large  tracts 
(238  U.  S.  at  p.  408) — the  only  possible  way — but 
the  expenses  of  taking  care  of  the  lands  and  the 
taxes  have  been  great  (Ex.  320,  Record,  Vol.  13, 
p.  7167),  while  the  railroads  have  been  carrying, 
and  must  continue  to  carry,  the  troops,  etc.,  of 
the  United  States  without  compensation  (Record, 
Vol.  5,  p.  2405-11,  2146). 

The  "aid"  expected  from  the  government  has 
not  been  received  and  the  mortgage  upon  the  lands, 
representing  the  loan  made  by  foreign  investors 
remains  unpaid! 

4.  Although  the  government  lias  thus  obtained 
its  main  purpose,  its  incidental  purpose  has  not 
been  accomplished.     Why? 


48 

Because  most  of  the  lands  are  covered  with  tim- 
ber and  are  incapable  of  cultivation  and  settle- 
ment, at  least  before  the  timber  is  removed;  and 
therefore  the  lands  cannot  be  sold  to  "actual  set- 
tlers." Thus  the  ill  considered  provisos  in  the 
grants  are  preventing  the  government  from  ob- 
taining its  purpose  and  depriving  the  railroad  of 
the  "aid"  to  which  it  is  entitled. 

5.  Since  the  "provisos"  of  the  land  grant  which 
this  court  was  asked  to  construe  were,  if  read  lit- 
erally and  strictly,  entirely  inapplicable  to  a  grant 
of  timber  lands,  and  because  the  literal  reading 
of  them  would  lead  to  a  result  more  or  less  unsat- 
isfactory to  all  the  parties,  this  Court  was  urged 
to  add  to  their  terms  qualifications  and  limitations 
which  as  a  practical  matter  would  make  them  work- 
able. The  railroad  claimed  that  the  restriction  of 
sales  of  "lands"  to  "actual  settlers"  upon  the 
terms  defined  should  be  construed  as  referring  to 
"lands  susceptible  of  settlement" — that  it  should 
not  be  supposed  that  Congress  in  an  act  to  "aid" 
the  railroad  would  insert  a  clause  preventing  the 
railroad  from  disposing  of  a  large  part  of  its  lands 
at  all;  the  Government  of  the  United  States  ar- 
gued for  an  addition  to  the  terms  of  these  provisos 
in  effect  that  upon  a  breach  of  the  covenant  the 
United  States  might  re-enter  and  forfeit  the  lands ; 
the  interveners  and  cross  complainants  asked  for 
an  amplification  of  the  terms  of  the  provisos  which 
would  constitute  the  railroad  not  the  absolute 
owner  of  the  lands  but  a  trustee  thereof. 

All  of  tliese  contentions  the  court  rejected  and 
it  construed  the  provisos  strictly  and  literally  say- 
ing (238  U.  S.  at  p.  422)  : 

"The  grants  must  be  taken  as  they  were 
given.     Assent   to   them,   was   required   and 


49 

made  and  we  can  not  import  a  different 
measure  of  the  requirement  and  the  assent 
than  the  language  of  the  act  expresses." 

This  Court  referred  to  the  more  or  less  obvious 
hardships  which  this  construction  might  impose 
upon  the  railroad  but  said  (238  U.  S.  at  p.  423)  : 

"Granting  the  obstacles  and  infirmities, 
they  were  but  promptings  and  reasons  for  an 
appeal  to  Congress  to  relax  the  law"; 

and  again  (at  p.  435)  : 

"Whatever  the  difficulties  of  performance, 
relief  could  have  been  applied  for  and,  it  might 
be,  have  been  secured  through  an  appeal  to 
Congress." 

This  Court  referred  to  its  own  inability  to 
grant  relief,  saying  (238  U.  S.  at  p.  436) : 

"We  can  only  enforce  the  provisos  as 
written,  not  relieve  from  them." 

and  adding  (p.  436) : 

' '  For  the  same  reason  we  cannot  at  the  in- 
stance of  the  Government  give  a  greater  sanc- 
tion to  them  than  Congress  intended,  nor  give 
to  cross  complainants  and  intervenors  a  right 
which  the  granting  acts  did  not  confer  upon 
them. ' ' 

6.  This  Court,  being  thus  constrained  to  give  an 
interpretation  to  the  provisos  which  was  unsat- 
isfactory to  all  the  parties  (and  which  in  effect 
might  prevent  the  settlement  of  the  lands — the 
incidental  purpose  of  the  Government — and  pre- 
vent the  railroad  from  receiving  the  "aid"  from 
the  Government  upon  the  promise  of  which  the 
railroad  was  built)   very  naturally  referred  the 


50 

questions  presented  to  Congress — having  first 
pointed  out  that  the  railroad  should  have  appeal- 
ed to  Congress  "to  relax  the  law"  long  before. 
The  object  of  this  Court  was,  we  believe,  to  afford 
the  Congress  an  opportunity  to  relax  the  law  and 
to  provide  a  method  by  which  the  granted  lands 
could  be  administered  for  the  greater  advantage 
of  all  concerned. 

7.  The  scope  of  legislation  which  the  Congress 
might  have  been  expected  to  enact  would  of  course 
depend  largely  upon  the  disposition  of  that  power- 
ful body.  It  would  be  supposed,  however,  that  the 
Congress  would  either  (1)  change  the  contract  of 
the  Government  with  the  railroad  and  take  away 
the  vested  rights  of  the  railroad  and  the  mortgagee 
but  only  upon  condition  that  the  Act  be  consented 
to  by  the  railroad  and  the  mortgagee,  or  (2)  at- 
tempt to  change  the  terms  of  the  covenants,  but 
only  in  such  a  way  as  not  to  effect  the  purpose  of 
the  grant  or  take  away  vested  rights. 

Such  legislation  would  naturally  provide  for  a 
classification  of  the  lands,  determining  what  lands 
if  any  are  now  ready  to  be  sold  to  "actual 
settlers ' '  and  what  lands  can  be  sold  thus  only  after 
the  timber  is  removed;  defining  who  should  be 
considered  to  be  "actual  settlers";  providing  for 
the  removal  of  the  timber  by  the  railroad  (the 
owner)  from  such  lands  as  would  thus  be  render- 
ed capable  of  actual  settlement,  and  the  subse- 
quent sale  of  the  lands  to  "actual  settlers";  and 
further  providing  for  the  disposition  of  those 
lands  owned  by  the  railroad  which  can  never,  be- 
cause of  their  character,  be  sold  to  actual  settlers. 


51 

8.  Instead  of  proceeding  on  any  such  lines,  the 
Congress  has  passed  an  Act  one  of  the  main  pur- 
poses of  which  (if  not  the  main  purpose)  is  to  se- 
cure large  sums  of  money  for  itself,  and  which  dis- 
poses of  the  problems  presented  to  it  in  almost 
complete  disregard  not  only  of  the  moral  rights, 
but  of  the  indefeasible  property  rights  of  the  rail- 
road and  the  mortgagee,  trustee  for  bondholders. 

9.  Perhaps  the  claim  will  be  made  by  the  Govern- 
ment that  this  court  in  suggesting  legislation 
which  would  "secure  to  the  railroad  company  all 
the  value  conferred  by  the  granting  acts ' '  has  ad- 
judged that  "all  the  value"  does  not  exceed  $2.50 
an  acre.  This  Court  decided  nothing  of  the  sort. 
It  did  not  hold  that  the  railroad  had  nothing  but 
a  power  of  sale,  but  on  the  contrary  that  it  had 
the  full  ownership  of  the  lands  without  any  im- 
plied limitations  and  including  the  power  of  sale 
although  with  certain  restrictions  upon  that 
power.    This  Court  said  (238  U.  S.  at  p.  434) : 

"There  was  a  complete  and  absolute  grant 
to  the  railroad  company  with  power  to  sell, 
limited  only  as  prescribed,  and  we  agree  with 
the  Government  that  the  company  'might 
choose  the  actual  settler;  might  sell  for  any 
price  not  exceeding  $2.50  an  acre;  might  sell 
in  quanties  of  40,  60  or  100  acres,  or  any 
amount  not  exceeding  160  acres." 

And  again  (238  II.  S.  at  p.  432) : 

"The  Acts  of  Congress  omit  regulation. 
Their  language  is  not  directive;  it  is  restric- 
tive only.  With  this  exception  the  grant  is 
unqualified."     (Italics  ours.) 


52 
POINT  II. 

THE  OWNER  OF  THESE  LANDS 
HAS  THE  UNQUALIFIED  RIGHT  TO 
THEIR  USE,  INCLUDING  THE  RIGHT 
TO  THE  TIMBER  THEREON,  AT 
LEAST  SO  FAR  AS  SUCH  USE  WILL 
NOT  PREVENT  THE  SALE  OF  THE 
LANDS  TO  ACTUAL  SETTLERS. 

1.  Practically  all  of  the  granted  lands  which  re- 
main unsold  are  covered  with  timber,  and  it  is 
the  purpose  of  the  Government  under  the  act  of 
June  9,  1916,  first  to  strip  these  lands  of  the 
timber  and  subsequently  to  offer  them  for  settle- 
ment. The  evidence  shows  (1)  that  a  large  part 
of  these  lands  would  not  be  fit  for  cultivation  even 
if  cleared  of  the  timber,  and  (2)  that  another 
large  part  of  these  lands,  although  susceptible  of 
cultivation  after  the  timber  is  removed,  cannot 
be  settled  upon  and  cultivated  until  after  such 
removal. 

(See  brief  for  Union  Trust  Company  upon  the 
first  argument  in  this  Court,  pages  31-77). 

As  to  just  how  much  of  the  land  can  never  be 
cultivated  and  how  much  cannot  be  settled  until 
the  timber  has  been  removed,  there  is  room  for 
dispute,  but  that  there  is  a  considerable  quantity 
of  lands  of  both  kinds  must  be  conceded. 

2.  That  these  lands  were  chiefly  valuable  for 
timber  was  clearly  recognized  by  this  Court  upon 
the  former  appeal,  for  it  wrote : 

4 '  It  is  however  clear  even  from  the  Govern- 
ment's  summary  of  the  evidence  that  lands 
which  may  be  fit  for  cultivation  have  a  greater 
value  on  account  of  the  timber  which  is  upon 


53 

them.  Besides  for  our  present  purposes  we 
may  accept  the  assertion  of  the  defendants." 
(238  U.  S.  at  p.  438.) 

The  "assertion  of  the  defendants"  thus  re- 
ferred to  appears  just  before  (pp.  437-8)  in  the 
opinion,  as  follows : 

"In  answering,  the  defendants  averred 
*  *  *  that  the  lands  were  chiefly  and  in  most 
instances  solely  of  value  because  of  the 
timber  thereon  and  are  not  fit  for  actual  set- 
tlement. And,  further,  that  the  lands  capa- 
ble of  actual  settlement  and  the  establish- 
ment of  homes  thereon  at  no  time  'exceeded 
(approximately)  300,000  acres,  consisting  of 
small  and  widely  separated  tracts,  all  of 
which  were  sold  to  actual  settlers,'  etc." 

It  was  with  a  full  understanding,  therefore, 
that  a  large  part  of  the  lands  could  not  be  sold 
to  actual  settlers,  that  this  Court  decided  that  the 
restrictive  covenants  must  be  held  to  apply  to  all 
the  lands — in  other  words  that  some  of  these  lands 
could  not  be  sold  for  a  very  long  time,  and  others 
not  at  all. 

3.  The  question  now  presented  is  whether  the 
Railroad  can  use  the  timber  upon  these  lands  un- 
til such  times  as  they  may  be  sold. 

This  question  is  of  the  greatest  importance  to 
the  Union  Trust  Company  as  trustee  for  bond- 
holders, for  all  the  rights  of  the  railroad  in  the 
lands  have  been  mortgaged  to  it,  and,  if  the  timber 
can  be  used  by  the  present  owner  or  by  a  pur- 
chaser upon  foreclosure  sale,  then  the  bonds 
which  it  represents  will  surely  be  paid — without 
dependence  upon  the  financial  situation  or  pros- 
perity of  the  railroads.     These  bondholders  who 


54 

advanced  their  money  to  construct  this  road  upon 
the  security  of  these  lands,  are,  we  respectfully 
urge,  entitled  to  every  bit  of  value  which  belongs 
to  the  security. 

This  question — the  right  of  the  owner  to  use  the 
timber — received  very  little  consideration  at  the 
time  of  the  decision  of  the  first  appeal  in  this  case. 
It  seems  to  have  been  taken  for  granted  that  the 
right  to  use  the  timber  was  an  incident  of  owner- 
ship, and  the  question  argued  at  length  was  as  to 
which  party  was  entitled  to  own  the  land,  the 
railroad  or  the  United  States. 

Now  however  the  question  is  sharply  presented 
in  two  ways  : 

(a)  By  the  decree  of  the  District  Court  upon 
the  mandate  of  this  Court,  which  permanently  en- 
joins the  cutting  of  timber,  and 

(b)  By  Act  of  Congress  of  June  9,  1916,  by 
which  the  Government  has  attempted  to  seize  the 
lands  and  sell  the  timber  for  its  own  profit. 

If  the  owner  of  the  lands  has  the  right  to  cut 
the  timber,  it  follows,  not  only  that  the  decree 
entered  in  the  District  Court  is  erroneous,  but 
also  that  the  Act  of  Congress  is  invalid. 

We  shall  proceed  therefore  to  discuss  the  ques- 
tion as  to  whether  the  owner  of  the  lands  or  the 
Government  has  the  right  to  use  the  timber,  as 
it  is  of  vital  importance  upon  both  points. 


55 
A. 


This  court  certainly  did  not  decide  that  the  owner 
could  not  use  the  timber,  but,  on  the  contrary,  in- 
timated that  it  could  do  so. 


1.  To  establish  that  the  Decree  of  the  District 
Court  did  not  follow  the  decision  of  this  Court, 
but  on  the  contrary  contained  very  important  pro- 
visions in  no  way  sanctioned  by  this  Court,  needs 
no  argument  whatever.  It  is  only  necessary  to 
arrange  side  by  side  (1)  the  carefully  framed 
conclusions  of  this  Court  as  stated  in  the  opinion 
and  (2)  the  provisions  of  the  decree  as  entered. 

[We  omit  from  the  comparison,  Sections  1,  5,  6 
and  7  of  the  decree.] 


Opinion  of  Supreme 
Court 

(238    U.    S.    393,    438) 


"That 
company 


the     railroad 


Decree  as  Entered 


"2.  That  the  defend- 
ants and  their  respec- 
tive officers  and  agents 


"should  not  only  be  "be  and  each  is  hereby 


"enjoined     from     sales 
(referring  to  "lands") 


"enjoined  from  selling 
the  lands  or  any  part 
thereof  granted  either 
by  the  Act  of  Congress 
approved  July  25,  1866, 
as  amended  by  the  Act 
of  Congress  of  April  10, 
1869,  or  by  the  Act  of 
Congress  approved  May 
4, 1870,  whether  the  said 
lands  be  situated  within 


56 


i  l  in    violation 
covenants, 


of     the 


"but"     the 
Company 


Bail  road 


the  place  or  indemnity 
limits  of  the  grants 
thereby  made, 

"to  any  person  not  an 
actual  settler  on  the 
land  sold  to  him,  or  in 
quantities  greater  than 
one-quarter  section  to 
one  purchaser,  or  for  a 
price  exceeding  $2.50 
per  acre ; 


"and  from  selling  any 
of  the  timber  on  said 
lands,  or  any  mineral 
or  other  deposits  there- 
in, except  as  a  part  of 
and  in  conjunction  with 
the  land  on  which  the 
timber  stands  or  in 
which  the  mineral  or 
other  deposits  are 
found ;  and  from  cutting 
or  removing  or  author- 
izing the  cutting  or  re- 
moval of  any  of  the  tim- 
ber thereon ;  or  from  re- 
moving or  authorizing 
the  removal  of  mineral 
or  other  deposits  there- 
in, except  in  connection 
with  the  sale  of  the  land 
bearing  the  timber  or 
containing  the  mineral 
or  other  deposits." 

"3.  That  the  defend- 
ants and  their  respec- 
tive officers  and  agents 


should  be 


!be,  and  each  is  hereby 


57 


"enjoined  from  any 
disposition  of  them 
whatever"  (referring  to 
the  lands) 


"enjoined  from  making 
or  agreeing  to  make, 
either  directly  or  indi- 
rectly, any  disposition 
whatsoever  of  said 
lands  or  of  any  part 
thereof 


"and  from  cutting  or 
authorizing  the  cutting 
or  removal  of  any  of  the 
timber  thereon. 


' '  or  of  the  timber  there-     "  or  of  the  timber  there- 
on on 


' '  or  any  part  thereof 

"or  of  any  mineral  or 
other  deposits  therein; 

1 '  from  cutting,  remov- 
ing or  authorizing  the 
cutting  or  removal  of 
the  timber  thereon 

"or  any  part  thereof 

"from  removing  or  au- 
thorizing the  removal  of 
mineral  or  other  de- 
posits therein ;  and 
from  disposing  of,  re- 
ceiving or  exerting  any 
control  over  any  money 
which  arose,  or  may 
hereafter  arise,  from 
said  lands,  either 
through  sales  thereof  or 
of  timber  thereon,  or 
through  condemnation 
proceedings  or  other- 
wise, and  now  on  de- 
posit, or  which  mav 
hereafter  be  placed  on 
deposit,  wTith  any  bank, 
clerk  of  court,  or  other 
institution  or  person,  to 


58 


wait  the  final  decision  of 
the  Supreme  Court  of 
the  United  States  in  this 


case 


"until  congress  shall 
have  a  reasonable 
opportunity  to  provide 
by  legislation 

"for  their  disposition 


"in  accordance  with 
such  policy  as  it  may 
deem  fitting  under  the 
circumstances  and  at  the 
same  time  secure  to  the 
defendants  all  the  value 
the  granting  acts  con- 
ferred upon  the  rail- 
road. 

"If  Congress  does  not 
make     such     provision 


"until  Congress  shall 
have  a  reasonable  op- 
portunity to  make  pro- 
vision by  legislation 

"for  the  disposition  of 
said  lands,  timber, 

' '  money,  mineral  or 
deposits 

' '  in  accordance  with 
such  policy  as  Congress 
may  deem  fitting,  under 
the  circumstances,  and 
at  the  same  time  secure 
to  the  defendants  all  the 
value  that  the  said 
granting  acts  conferred 
upon  the  grantees. 

"4.  That  if  Congress 
does  not  make  provision 
for  the  disposition  as 
aforesaid  of  said  lands 
timber. 


"the  defendants  may 
aprnv  to  the  District 
Court  within  a  reason- 
able time,  not  less  than 
six  months,  from  the 
entrv  of  the  deoree  here- 
in, for  a  modification  of 


"money,  timber,  min- 
eral or  other  deposits 

' '  the  defendants  may 
apply  to  the  court  with- 
in a  reasonable  time,  but 
not  less  than  six  months 
from  the  entry  of  this 
decree,  for  a  modifica- 
tion of  so  much  of  the 


59 


so  much  of  the  injunc- 
tion herein  ordered  as 
enjoins  any  disposition 


injunction  herein  or- 
dered as  forbids  any 
disposition 


"of  the  lands  and  tim-     "of    the     said     lands, 
ber  timber 

"money,  mineral  or 
other  deposits,  or  any 
part  thereof 

"until    Congress    shall     "until    Congress    shall 
act.  act 


4 '  and  the  court  in  its  dis- 
cretion may  modify  the 
decree  accordingly" 


"and  the  court  hereby 
reserves  the  right  to 
modify  this  decree  in 
that  regard  if,  in  its 
opinion,  good  cause 
shall  then  exist  for  do- 
ing so." 


2.  From  the  comparison  above,  it  is  obvious  that 
to  the  permanent  injunction  against  sales  of  the 
lands,  contrary  to  the  terms  of  the  covenant,  as 
directed  by  this  Court,  there  has  been  added  a 
permanent  injunction  against  the  use  of  said  lands 
at  least  so  far  as  relates  to  the  taking  of  timber 
and  minerals;  also  that  to  the  temporary  injunc- 
tion against  any  sales  of  the  lands  (whether  con- 
trary to  the  covenant  or  not)  or  the  timber  there- 
on, as  directed  by  this  Court,  there  has  been 
added  an  injunction  against  the  removal  of  any 
mineral  or  other  deposits  in  the  land,  and  further 
an  injunction  against  disposing  of,  receiving  or 
exerting  any  control  over  any  moneys  received 


60 

from  sales  of  land  or  timber  (although  not  in  vio- 
lation of  any  covenant). 

3.  It  is  not  necessary  to  refer  to  the  briefs  sub- 
mitted or  to  the  earlier  parts  of  the  opinion  of  this 
Court  to  show  that  this  Court  was  fully  aware  of 
the  fact  that  the  timber  on  these  lands  is  valuable 
and  that  it  understood  perfectly  that  it  would  be 
quite  possible,  if  the  lands  were  not  sold,  to  use  and 
cut  timber  and  remove  minerals  and  other  deposits 
therefrom ;  it  is  sufficient  to  refer  to  its  conclusions 
as  stated  at  the  end  of  the  opinion.  It  there  ap- 
pears that  in  order  to  preserve  the  lands  exactly 
as  they  were  pending  legislation,  this  Court  di- 
rected that  not  only  should  the  Railroad  perman- 
ently "be  enjoined  from  sales"  {i.  e.,  of  the  lands, 
which  had  been  the  subject  under  consideration) 
"in  violation  of  the  covenants,  but  enjoined  from 
any  disposition  of  them"  (i.  e.,  the  lands  just  re- 
ferred to)  "whatever,  or  of  the  timber  thereon, 
and  from  the  cutting  or  authorizing  the  cutting  or 
removal  of  any  of  the  timber  thereon,  until,  etc." 

Thus  so  far  as  the  permanent  injunction  was 
concerned — the  determination  of  the  rights  of  the 
parties  as  limited  by  the  covenants — this  Court, 
having  immediately  in  mind  the  possibility  of  re- 
moving timber,  enjoined  sales  of  the  lands  only, 
making  no  limitation  except  temporarily  upon  the 
right  to  use  the  timber. 

This  followed  naturally  from  the  keynote  of 
the  opinion:  that  the  covenant  must  be  given  its 
literal  meaning,  harsh  as  the  effect  might  be  upon 
the  railroad,  and  unsatisfactorily  as  such  a  con- 
struction might  be  to  the  Government  and  also  to 
the  cross-complainants  and  intervenors  all  of  whom 
wished  to   have  its  terms  added  to  or  enlarged; 


61 

that  although  Congress  might  relax  the  severity 
of  the  covenant  this  Court  could  not;  that  the  rail- 
road could  not  sell  any  lands  except  in  accordance 
with  the  terms  of  this  restrictive  covenant,  but 
that  "there  was  a  complete  and  absolute  grant  to 
the  Railroad  Company  with  power  to  sell,  limited 
only  as  prescribed"  (italics  ours)  and  that  "with 
this  exception  the  grant  is  unqualified"  (238  U.  S. 
at  pp.  434,  432,  Record,  Vol.  1,  pp.  154,  151). 

If  Congress  should  not  legislate  on  the  subject, 
it  was  contemplated,  we  submit,  that  the  tem- 
porary injunction  against  "any  disposition"  of 
lands  or  timber  would  be  vacated.  There  would 
then  remain  as  the  final  judgment  (if  the  decree 
of  the  District  Court  had  been  entered  in  compli- 
ance with  the  opinion  of  this  court)  a  permanent 
injunction  against  a  sale  of  the  lands  except  in  ac- 
cordance with  the  covenant,  but  with  no  restraint 
upon  the  use  of  the  lands,  or  the  preparation  of 
the  lands  for  sale. 

If  this  Court  had  intended  in  its  carefully 
framed  conclusions  to  decide  that  the  railroad 
should  be  permanently  enjoined  from  any  sales  of 
the  lands  and  also  from  any  use  of  the  timber  or 
minerals  (i.  e.,  as  has  now  been  adjudged  in  the 
decree)  hoiv  simple  it  would  have  been  to  say  so! 
Instead,  in  very  sharp  contrast,  and  in  the  very 
next  clause,  this  Court  has  pointed  out  that  the 
temporary  injunction  should  be  against  any  dis- 
position of  land  or  timber.  The  conclusion 
seems  irresistable  that  this  Court  has  decided,  in 
effect,  that  the  covenant  which  restricts  the  sale 
of  the  lands  does  not  affect  the  rights  of  the 
owTier  to  use  the  timber. 


62 
B. 


The  right  of  an  owner  to  use  his  property  should 
not  be  destroyed  in  any  way  or  even  restricted  except 
for  a  most  compelling  reason. 

1.  If  it  can  be  said  that  the  right  of  the  owner  to 
cut  timber  has  not  been  decided  already  by  this 
Court,  we  believe  there  can  be  little  doubt  as  to 
its  decision  now  in  view  of  the  construction  which 
it  has  given  already  to  the  covenant,  and  in  view 
of  the  law  denning  a  person's  right  to  the  use  of 
his  property. 

2.  The  Railroad  paid  the  price  for  these  lands 
and  became  the  absolute  owner  thereof.  The  pro- 
visos were  a  restriction  upon  the  power  of  sale, 
but,  except  as  its  power  to  dispose  of  the  lands 
was  thus  limited,  its  rights  in  the  lands  became  the 
same  as  those  of  other  owners  of  real  property.  As 
often  as  has  been  necessary,  courts  have  declared 
that  the  rights  of  an  owner  in  his  property  are 
unlimited — except  by  the  maxim  which  requires 
that  one  must  not  use  his  own  property  in  such 
a  way  as  to  injure  another.  (Reeves'  Law  of 
Real  Property,  Sec.  423.)  Here  the  Railroad  is 
bound,  in  addition,  to  use  its  lands  in  such  a  way 
as  not  to  violate  the  proviso,  but,  except  as  the 
proviso  may  require  that  the  timber  shall  not  be 
cut,  its  rights  as  an  owner  are  unlimited.  It  fol- 
lows that  if  the  covenant  was  restrictive,  as  we 
believe  this  court  has  determined,  then  the  Rail- 
road may  use  the  lands  in  any  way  and  cut  the 
timber  therefrom  until  such  times  as  the  lands 
shall  be  sold.     If,  on  the  other  hand,  it  could  be 


63 

said  that  the  covenants  are  not  "restrictive  only" 
but  impose  an  affirmative  obligation  on  the  Rail- 
road to  sell,  then,  at  the  least  the  Railroad  may 
use  the  timber  unless  such  use  would  prevent  its 
compliance  with  the  covenant. 

The  situation  is  somewhat  similar  to  that  of  a 
tenant  for  life  or  for  a  term  of  years  who  holds 
under  an  implied  covenant  to  surrender  the  land 
at  the  end  of  the  term  in  as  good  condition  as 
when  he  received  it.  Except  as  limited  by  the 
implied  covenant,  the  tenant  may  use  the  land  as 
he  pleases  and  remove  timber  therefrom. 

3.  Unquestionably  the  grant  of  lands  by  the 
Government  vested  in  the  grantee  all  the  rights  of 
complete  ownership.  Among  such  rights  are  in- 
cluded, of  course,  the  right  to  cut  the  timber. 

Certainly  the  United  States  has  not  retained  any 
rights  in  the  timber.  It  has  parted  with  the  lands 
by  an  absolute  grant  and  for  a  valuable  considera- 
tion. {Burke  v.  Southern  Pacific  R.  R.  Co.,  234  U. 
S.,  at  p.  679).  If  it  can  be  argued  that  the  timber 
belongs  to  any  one  other  than  the  Railroad  Com- 
pany, the  argument  must  relate  to  the  claims  of 
prospective  settlers,  but  this  court  has  expressly 
decided  that  the  prospective  settlers  (intervenors 
and  cross-complainants  in  this  case)  have  no 
rights  in  the  timber. 

4.  The  granting  acts  are  clear  enough  in  their 
terms  so  far  as  timber  is  concerned.  They  grant 
lands  to  the  Railroad  (which,  of  course,  includes 
the  timber) ;  and  whereas,  if  it  had  been  intended 
to  cut  down  the  grant  by  taking  away  its  possible 
use,  the  acts  might  have  excepted  from  the  op- 
eration  of  the  grants  the  timber  upon  the  lands. 


64 

yet  it  is  noticeable  that  there  is  no  sign  whatever 
of  any  such  exception  of  the  timber  from  the 
grant.  It  should  be  noticed,  further,  in  this  con- 
nection, that  the  Acts  which  it  passed  show  that 
the  Congress  had  clearly  in  mind  (1)  the  possibil- 
ity of  making  exceptions  from  the  grant  and  (2) 
the  value  of  timber ;  for  it  expressly  excepted  min- 
eral lands  from  the  grants  and  conveyed  to  the 
Railroad  the  right  to  use  for  the  construction  of 
the  road  timber  taken  from  such  mineral  lands. 

If  the  Congress  had  intended  to  except  the  tim- 
ber from  the  grant,  it  could  only  have  been  ac- 
complished by  an  exception  similar  to  that  applied 
to  the  mineral  lands. 

It  should  be  noticed  in  this  connection  that  al- 
though mineral  lands  were  excepted  from  the 
land  grants,  it  was  expressly  provided  that  "the 
term  mineral  lands  shall  not  include  lands  con- 
taining coal  and  iron".  That  such  lands  could 
not  be  sold  to  actual  settlers — tillers  of  the  soil 
— but  might  be  very  valuable  in  the  construction 
and  subsequent  operation  of  the  Railroad  is  obvi- 
ous, and  the  only  possible  conclusion  is  that  the 
Congress  in  accomplishing  the  primary  purpose 
of  the  grants  to  aid  the  construction  of  the  Rail- 
road, intended  and  expected  that  the  Railroad 
should  have  the  use  of  all  valuable  things  in  or 
upon  the  land  excepting  only  the  minerals  (pre- 
cious metals)  which  were  especially  excepted. 

A  sidelight  on  how  an  Act  should  be  framed, 
which  is  intended  to  deprive  the  owner  of  land  of 
the  use  of  timber  upon  it,  is  found  in  Section  3  of 
the  Act  of  Congress  of  June  9,  1916,  relating  to 
this  very  land,  which  provides  that  any  person 
entering  mineral  lands  "shall  not  acquire  title  to 
timber." 


65 

5.  We  have  said  above  that  the  only  term  of  the 
land  grant  (the  contract  between  the  Government 
and  the  Railroad)  which  can  be  claimed  to  cut 
down  the  right  to  use  the  lands  is  the  covenant 
which  has  been  construed  already  by  this  Court; 
and  that  no  construction  of  the  covenant  warrants 
the  reading  into  it  of  a  clause  depriving  the  owner 
of  the  right  to  use  or  sell  the  timber.  In  addition, 
we  should  point  out  that  this  Court  has  already 
in  construing  this  covenant  held  firmly  that  it 
would  not  permit  any  qualification  or  addition  to 
its  terms,  (although  a  literal  construction  might 
and  probably  would,  involve  great  hardship.)  This 
Court  has  said  (238  U.  S.  at  pp.  434,  432)  that  the 
grants  constitute  "a  complete  and  absolute  grant 
to  the  Railroad  Company  with  power  to  sell  lim- 
ited only  as  prescribed",  and  (referring  to  the  re- 
strictive language  of  the  provisos)  that  "with  this 
exception  the  grant  is  unqualified.  (Italics  ours.) 
Yet  the  Government  would  now  have  this  Court 
insert  in  the  covenant  contained  in  the  granting 
acts,  another  restrict  ion  of  great  importance.  In 
brief,  to  the  proviso  which  reads : 

"And  provided  further  that  the  lands 
granted  by  the  act  aforesaid  shall  be  sold  to 
actual  settlers  only  in  quantities  not  greater 
than  one-quarter  section  to  one  purchaser  and 
for  a  price  not  exceeding  $2.50  per  acre;" 

the  Government  seeks  to  have  added  something 
like  the  following: 

And  provided  further  that  until  such  times 
us  the  hinds  are  sold  hy  the  Railroad,  even  if 
they  arc  never  sold,  the  Railroad  shall  not. 
use  the  lands  in  any  way  or  the  timber,  coal, 
iron  and  stone  thereon! 


66 

6.  An  examination  of  the  authorities  will  dis- 
close cases  illustrating  the  limitation  upon  the 
rights  of  a  tenant  for  life,  etc.,  to  use  timber;  and 
there  are  well  considered  cases  in  this  Court  es- 
tablishing the  rights  to  the  timber  of  those  to 
whose  estate  a  condition  subsequent  is  annexed. 

Schulenberg  v.  Harriman,  21  Wall,  44. 
Railroad  Land  Co.  v.  Court  right,  21  Wall, 

310. 
United  States  v.  Loughrey,  172  U.  S.  206. 
United  States  v.  Tennessee  d  Coosa  R.  R., 

176  U.  S.  242. 

There  are  also  cases  in  the  State  courts  holding 
that  the  owner  of  a  determinable  fee  is  entitled  to 
use  the  products  of  the  lands. 

Gannon  v.  Peterson,  193  111.  372. 
Faraton  v.  Green,  108  N.  C.  339. 

The  books,  however,  will  be  searched  in  vain, 
we  believe,  for  any  case  which  will  justify  the 
claim  now  made  by  the  Government  that  the  owner 
of  a  "complete  and  absolute  grant"  can  be  de- 
prived of  the  right  to  use  the  timber  growing  upon 
his  lands. 


C. 


The  owner,  having  all  the  burdens  and  obligations, 
should  have  all  the  rights  and  privileges  of  proprietor^ 
ship. 

1.  An  "actual  settler"  is  one  who  actually  re- 
sides upon  the  land  and  for  agricultural  purposes. 


67 

(Peterson  v.  First  Division,  St.  Paul,  etc.,  R.  R. 
Co.,  27  Minn.  218;  Stroud  v.  Missouri  River, 
etc.,  R.  R.  Co.,  4  Dillon  396,  403). 

There  is  a  large  amount  of  these  lands  which 
can  never  be  used  for  agricultural  purposes  and 
which,  therefore,  can  never  be  sold  under  the  terms 
of  the  provisos.  There  are,  moreover,  other  lands 
which  are  very  heavily  timbered,  from  which  the 
timber  cannot  be  removed  except  at  great  cost, 
and  which  cannot  be  sold,  therefore,  to  actual  set- 
tlers under  the  terms  of  the  provisos  until  the 
timber  has  first  been  removed.  (Under  the  Act 
of  June  9,  1916,  the  Government  proposes  to  sell 
this  timber  and  have  it  removed  as  a  preliminary 
to  disposing  of  the  lands.)  Moreover,  it  is  no 
small  matter  to  remove  this  timber;  for 

4kXo  man  would  be  willing  to  subjugate  this 
piece  of  forest  for  the  mere  sake  of  cultivating 
it";  (See  United  States  v.  Budd,  144  U.  S., 
154,  at  pp.  167,  168). 

and  these  lands  can  be  cleared  from  timber  only 
when  the  lands  or  timber  thereon  are  sold  in  large 
quantities. 

It  follows  from  the  above  that  the  railroad  hav- 
ing constructed  its  line  at  the  instance  and  for 
the  benefit  of  the  United  States,  will  be  prevented 
from  selling  these  lands  in  compliance  with  the 
provisos ;  and,  in  so  far  as  it  may  receive  any  ben- 
efit whatever  from  their  ownership,  it  must  be 
only  such  incidental  advantages  as  are  derived 
from  the  occupation  of  the  lands  and  the  use  of 
the  timber,  coal,  iron,  etc. 

2.  During  the  forty  years  or  more  that  the  Rail- 
road has  owned  them,  these  lands  have  been  sub- 


68 

jected  to  heavy  taxation  in  the  State  of  Ore- 
gon. Had  the  lands  been  owned  by  the 
United  States  there  could  have  been  no  taxation 
by  the  State,  and  if  the  timber  thereon  (the  only, 
value)  had  belonged  to  the  United  States,  the  Rail- 
road would  have  been  spared  most  of  these  ex- 
penses. Moreover,  during  all  these  years  the 
Railroad  has  had  the  duty  of  watching  over  these 
lands  and  protecting  them  from  fire  and  trespass. 
If  the  Railroad  had  not  thus  defended  its  lands 
against  depredations  and  destruction,  much  of  the 
timber  would  have  been  destroyed  already.  The 
cost  of  such  protection  for  a  small  tract  may  not 
be  considerable ;  for  this  great  tract  of  land  it  has 
amounted  to  great  sums.  Yet  it  is  now  claimed 
that  this  timber  which  was  conveyed  by  the  Gov- 
ernment for  a  valuable  consideration  to  the  Rail- 
road and  over  which  the  Railroad  has  ever  since 
performed  all  the  duties  of  ownership,  including 
the  payment  of  taxes,  is  now  of  no  value  whatever 
to  the  railroad  as  it  cannot  be  permitted  in  any 
way  to  use  its  own  property ! 

3.  Without  regard  to  the  provisos  of  the  land 
grants,  it  would  seem  only  a  matter  of  simple  jus- 
tice to  permit  the  one  who  must  bear  the  bur- 
dens of  ownership  of  real  property  to  receive  the 
advantages  therefrom.  To  the  mortgagee  a  con- 
trary ruling  seems  especially  harsh  because  the 
taxes,  based  upon  the  value  of  the  lands  with  tim- 
ber thereon,  have  been  accumulating  for  some  time 
and  they  are  a  lien  prior  to  that  of  the  mortgage ; 
so  that  it  follows  that,  if  the  Railroad,  being  pre- 
vented from  selling  the  lands  by  the  provisos,  can- 
not make  any  use  of  them,  the  security,  upon  which 
in  large    part    the  bondholders    advanced    their 


69 

money  for  the  construction  of  the  Railroad,  will 
be  lost. 


D. 


The  main  purpose  of  the  grant  would  be  defeated 
if  the  railroad  should  be  deprived  of  the  right  to  use 
the  timber  while  it  remains  the  owner  of  the  lands. 

1.  As  this  Court  has  already  determined,  the 
paramount  purpose  of  the  land  grants  was  to  ob- 
tain the  construction  of  the  Railroad,  and  it  should 
follow  that  (since  the  Railroad  could  hardly  have 
been  constructed  without  the  land  grants)  a 
most  important  part  of  that  purpose  was  to 
furnish  aid  to  the  Railroad.  A  small  amount  of 
lands  only  have  been  sold  in  accordance  with  the 
provisos,  and,  although  some  lands  have  been  sold 
in  greater  quantities  and  for  greater  prices  than 
required  by  the  provisos,  it  is  apparent,  from  the 
terms  of  the  Act  of  1916,  that  the  Government 
intends  to  claim  against  the  Railroad  all  amounts 
received  for  the  lands  in  excess  of  $2.50  an  acre. 
Meanwhile,  the  cost  of  taking  care  of  the  lands 
and  preserving  the  timber,  together  with  the 
taxes  which  have  been  paid,  have  amounted  to 
very  great  sums.  The  lands  now  remaining,  be- 
cause covered  by  timber  or  otherwise,  cannot  be 
sold  in  compliance  with  the  covenant.  It  fol- 
lows necessarily  that,  unless  the  timber  on  these 
lands  can  be  cut  by  the  Railroad,  it  can  derive 
no  substantial  profit  from  the  lands,  although 
obliged  to  continue  payment  of  taxes  to  the  State 


70 

and  to  transport  munitions,  troops,  etc.,  for  the 
Government  without  charge. 

2.  If  this  result  is  reached,  the  Government  will 
have  obtained  what  it  sought  to  purchase ;  but  the 
railroad  will  never  receive  the  price  which  the 
Government  undertook  to  pay  (to  wit,  "aid" 
through  the  granted  lands),  but  will  be  saddled 
instead  with  a  permanent  burden. 


E. 


The  covenant  relating  to  the  sale  of  lands  is  re- 
strictive only;  the  railroad  is  not  compelled  to  sell  the 
lands. 

1.  This  Court  has  decided  already,  we  under- 
stand, that  the  terms  of  the  proviso  limiting  the 
exercise  of  the  power  of  sale  are  restrictive.  It 
has  said  (238  U.  S.  at  p.  432;  italics  ours) : 

"The  acts  of  Congress  omit  regulation. 
The  language  is  not  directive ;  it  is  restrictive 
only.  With  this  exception,  the  grant  is  un- 
qualified. ' ' 

and  (at  p.  416) : 

"There  was  also  the  purpose  to  restrict 
the  sale  of  the  granted  lands  to  actual  set- 
tlers." 

and  (at  p.  418) : 

"The  contention  encounters  the  Govern- 
ment's admission  that  there  was  no  obliga- 
tion imposed  upon  the  Railroad  to  sell." 


71 

and  (at  p.  434) : 

"When  the  granted  lands  were  withdrawn 
from  those  laws  (public  land  laws)  and  prim- 
arily devoted  to  anotner  purpose  they  were 
committed  to  another  power  to  be  admin- 
istered for  such  purpose,  and  a  discretion  in 
the  exercise  of  the  power,  within  the  restric- 
tion imposed,  was  necessarily  conferred." 

and  (at  p.  434): 

"There  was  a  complete  and  absolute  grant 
to  the  Railroad  Company  with  power  to  sell 
limited  only  as  prescribed  and  we  agree  with 
the  Government  that  the  Company  'might 
choose  the  actual  settler  and  sell  for  any 
price  not  exceeding  $2.50'  an  acre ;  might  sell 
in  quantities  of  40,  60,  or  100  acres,  or  any 
amount  not  exceeding  160  acres.'  " 

That  a  covenant  to  sell  to  "actual  settlers 
only," — like  a  deed  to  use  land  for  a  certain  pur- 
pose only — does  not  imply  an  affirmative  obliga- 
tion to  sell  the  lands  or  use  the  property,  seems 
too  plain  for  argument. 

See  Madore's  Appeal,  129  Penn  St.,  15,  25. 

2.  We  urge  therefore  that  since  the  covenants  are 
restrictive  and  there  is  no  obligation  upon  the 
railroad  to  sell  the  lands,  it  may  use  them,  until 
they  are  sold,  in  any  way  for  its  advantage.  It 
is  important  however  to  notice  that,  even  if 
there  is  an  affirmative  obligation  upon  the  rail- 
road to  sell  the  lands,  it  should  be  within  its 
power,  not  only  to  do  whatever  will  be  of  as- 
sistance in  selling  the  lands  (as  for  instance  the 
clearing  of  the  timber  from  the  lands),  but  also 
to   exercise   every  right   of   ownership  over  the 


72 

lands  which  will  not  prevent  sales  thereof  in  ac- 
cordance with  the  provisos.  If  the  removal  of 
any  of  the  timber  would  prevent  compliance  with 
the  terms  of  the  covenant,  the  burden  should  be 
upon  the  Government  to  establish  that  fact.  This, 
it  would  seem,  they  are  estopped  from  doing  by 
the  very  terms  of  the  Act  of  June  9,  1916,  which 
provides  for  the  cutting  of  the  timber  in  order  to 
prepare  the  lands  for  sale — thus  confirming  the 
evidence,  which  is  to  be  found  in  the  record  of 
this  case,  as  to  the  desirability  of  removing  the 
timber. 


POINT  III. 

Tlie  decree  should  not  have  award- 
ed costs  ag-ainst  the  Union  Trust 
Company  individually  and  as  Trus- 
tee. 

At  the  time  this  suit  was  brought  the  Govern- 
ment would  not  have  been  satisfied  with  strict 
compliance  with  the  provisos  in  the  grants;  the 
purpose  of  the  suit  was  to  have  the  lands  for- 
feited and  the  lien  of  the  mortgage  cancelled. 
Except  for  this  purpose,  it  was  unnecessary  to 
make  the  Union  Trust  Company  a  party  at  all. 
The  Trust  Company  was,  of  course,  bound  to  re- 
sist this  claim  and  did  so  successfully,  the  decree 
of  the  District  Court  being  reversed  by  this  Court. 

The  decree  entered  upon  the  mandate  of  this 
Court,  to  be  sure,  enjoins  all  the  defendants  from 
selling  the  lands,  but  in  this  respect  it  departs 
from  the  opinion  of  this  Court,  which  directed 


73 

only  an  injunction  against  the  defendant  railroad 
company.  Upon  such  a  record  there  was  no  jus- 
tification for  the  imposition  of  costs  upon  the  de- 
fendant Union  Trust  Company. 


CONCLUSION. 

For  the  reasons  stated  above,  the  Act  of  June  9, 
1916,  should  be  adjudged  invalid;  and  the  decree  ap= 
pealed  from  should  be  modified  so  as  to  conform  to  the 
mandate  of  this  Court,  and  especially  so  as  to  enjoin 
only  sales  of  the  lands  contrary  to  the  terms  of  the 
covenants,  without  prejudice  to  the  rights  of  the 
railroad  and  the  mortgagee  to  use  the  lands  and  the 
timber  thereon  and  the  coal  and  iron  therein. 

Dolph,  Mallory,  Simon  &  G-earin, 
Miller,  King,  Lane  &  Trafford, 
Solicitors  for  Defendant  and  Appel- 
lant, Union  Trust   Company    of 
New  York. 

Perry  D.  Trafford, 
Of  Counsel. 


75 
Appendix  A. 

ACT  OF  CONGRESS  OF  JUNE  9,  1916,  COMMON- 
LY KNOWN  AS  THE  FERRIS  ACT. 

[Public — No.  86 — 64th  Congress.] 
[H.  R.  14864.] 

An  Act  To  alter  and  amend  an  Act  entitled  "An 
Act  granting  lands  to  aid  in  the  construction  of  a 
railroad  and  telegraph  line  from  the  Central  Pa- 
cific Railroad,  in  California,  to  Portland,  in  Ore- 
gon," approved  July  twenty -fifth,  eighteen  hun- 
dred and  sixty-six,  as  amended  by  the  Acts  of 
eighteen  hundred  and  sixty-eight  and  eighteen 
hundred  and  sixty-nine,  and  to  alter  and  amend 
an  Act  entitled  "An  Act  granting  lands  to  aid  in 
the  construction  of  a  railroad  and  telegraph  line 
from  Portland  to  Astoria  and  McMinnville,  in  the 
State  of  Oregon,"  approved  May  fourth,  eighteen 
hundred  and  seventy,  and  for  other  purposes. 

Whereas  by  the  Acts  of  Congress  approved  April 
tenth,  eighteen  hundred  and  sixty-nine  (Four- 
teenth Statutes  at  Large,  page  two  hundred  and 
thirty-nine),  and  May  fourth,  eighteen  hundred 
and  seventy  (Sixteen  Statutes  at  Large,  page 
ninety-four),  it  was  provided  that  the  lands 
granted  to  aid  in  the  construction  of  certain 
railroads  from  Portland,  in  the  State  of  Oregon, 
to  the  northern  boundary  of  the  State  of  Cali- 
fornia, and  from  Portland  to  Astoria  and  Mc- 
Minnville, in  the  State  of  Oregon,  should  be  sold 
to  actual  settlers  only,  in  quantities  not  exceed- 
ing one  hundred  and  sixty  acres  to  each  person 
and  at  prices  not  greater  than  $2.50  per  acre; 
and 


7G 

Whereas  the  Oregon  and  California  Railroad 
Company,  beneficiary  of  said  acts,  has  violated 
the  terms  under  which  the  said  lands  were 
granted  by  selling  certain  of  said  lands  to  per- 
sons other  than  actual  settlers,  by  selling  in  quan- 
tities of  more  than  one-quarter  section  to  each 
person,  by  selling  at  prices  in  excess  of  $2.50 
per  acre,  and  by  refusing  to  sell  any  further 
portions  of  such  lands  to  actual  settlers  at  any 
price,  and  in  so  doing  has  willfully  violated  the 
terms  of  the  statutes  by  which  the  said  lands 
were  granted;  and 

Whereas  in  the  suit  instituted  by  the  Attorney- 
General  of  the  United  States,  pursuant  to  the 
authority  and  direction  contained  in  the  joint 
resolution  of  April  thirtieth,  nineteen  hundred 
and  eight  (Thirty-fifth  Statutes  at  Large,  page 
five  hundred  and  seventy-one),  the  Supreme 
Court  of  the  United  States,  in  its  decision  ren- 
dered June  twenty-first,  nineteen  hundred  and 
fifteen  (Two  hundred  and  thirty-eighth  United 
States,  page  three  hundred  and  ninety-three), 
ordered  that  the  Oregon  and  California  Rail- 
road Company  be  enjoined  from  making  further 
sales  of  lands  in  violation  of  the  law,  and  that 
the  said  railroad  company  be  further  enjoined 
from  making  any  sales  whatever  of  either  the 
land  or  the  timber  thereon  until  Congress 
should  have  a  reasonable  opportunity  to  provide 
for  the  disposition  of  said  lands  in  accordance 
with  such  policy  as  Congress  might  deem  fitting 
under  the  circumstances  and  at  the  same  time 
secure  to  the  railroad  company  all  the  value  con- 
ferred by  the  granting  Acts ;  and 

Whereas  it  was  expressly  provided  by  section 
twelve  of  the  Act  of  July  twenty-fifth,  eighteen 
hundred  and  sixty-six  (Fourteenth  Statutes  at 


77 

Large,  page  two  hundred  and  thirty-nine),  that 
Congress  might  at  any  time,  having  due  regard 
for  the  rights  of  the  grantee  railroad  company, 
add  to,  alter,  amend,  or  repeal  the  Act  making 
the  grant ;  and 

Whereas  the  Oregon  and  California  Railroad 
Company  and  its  predecessors  in  interest  re- 
ceived a  large  sum  of  money  from  sales  of  said 
land  for  prices  in  excess  of  $2.50  per  acre,  and 
from  leases,  interest  on  contracts,  and  so  forth ; 
and 

Whereas  the  aforesaid  granting  Acts  conferred 
upon  the  said  railroad  company  the  right  to  re- 
ceive not  more  than  $2.50  per  acre  for  each  acre 
of  land  so  granted  :    Therefore 


Be  it  enacted  by  the  Senate  and  House  of  Rep- 
resentatives of  the  United  States  of  America  in 
Congress  assembled,  That  the  title  to  so  much  of 
the  lands  granted  by  the  Act  of  July  twenty-fifth, 
eighteen  hundred  and  sixty-six,  entitled  "An  Act 
granting  lands  to  aid  in  the  construction  of  a  rail- 
road and  telegraph  line  from  the  Central  Pa- 
cific Railroad  in  California  to  Portland,  in  Ore- 
gon," as  amended  by  the  Acts  of  eighteen  hun- 
dred and  sixty-eight  and  eighteen  hundred  and 
sixty-nine,  for  which  patents  have  been  issued  by 
the  United  States,  or  for  which  the  grantee  is  en- 
titled to  receive  patents  under  said  grant,  and  to 
so  much  of  the  lands  granted  by  the  Act  of  May 
fourth,  eighteen  hundred  and  seventy,  entitled 
"An  Act  granting  lands  to  aid  in  the  construc- 
tion of  a  railroad  and  telegraph  line  from  Port- 
land to  Astoria  and  McMinnville,  in  the  State  of 
Oregon,"  for  which  patents  have  been  issued  by 


78 

the  United  States,  or  for  for  which  the  grantee 
is  entitled  to  receive  patents  under  said  grant,  as 
had  not  been  sold  by  the  Oregon  and  California 
Railroad  Company  prior  to  July  first,  nineteen 
hundred  and  thirteen,  be,  and  the  same  is  hereby, 
revested  in  the  United  States:  Provided,  That 
the  provisions  of  this  Act  shall  not  apply  to  the 
right  of  way  to  the  extent  of  one  hundred  feet  in 
width  on  each  side  of  the  railroad  and  all  lands 
in  actual  use  by  said  railroad  company  on  De- 
cember ninth,  nineteen  hundred  and  fifteen,  for 
depots,  sidetracks,  wood  yards,  and  standing 
grounds. 

Sec.  2.  That  the  Secretary  of  the  Interior,  in 
cooperation  with  the  Secretary  of  Agriculture, 
or  otherwise,  is  hereby  authorized  and  directed, 
after  due  examination  in  the  field,  to  classify 
said  lands  by  the  smallest  legal  subdivisions  there- 
of into  three  classes,  as  follows : 

Class  one.  Power-site  lands,  which  shall  in- 
clude only  such  lands  as  are  chiefly  valuable  for 
water-power  sites,  which  lands  shall  be  subject  to 
withdrawal  and  such  use  and  disposition  as  has 
been  or  may  be  provided  by  law  for  other  public 
lands  of  like  character. 

Class  two.  Timberlands,  which  shall  include 
lands  bearing  a  growth  of  timber  not  less  than 
three  hundred  thousand  feet  board  measure  on 
each  forty-acre  subdivision. 

Class  three.  Agricultural  lands,  which  shall 
inclde  all  lands  not  falling  within  either  of  the 
two  other  classes : 

Provided,  That  any  of  said  lands,  however 
classified,  may  be  reclassified,  if,  because  of  a 
change  of  conditions  or  other  reasons,  such  ac- 


79 

tion  is  required  to  denote  properly  the  true  char- 
acter and  class  of  such  lands:  Provided  further, 
That  all  the  general  laws  of  the  United  States 
now  existing  or  hereafter  enacted  relating  to  the 
granting  of  rights  of  way  over  or  permits  for  the 
use  of  public  lands  shall  be  applicable  to  all  lands 
title  to  which  is  revested  in  the  United  States 
under  the  provisions  of  this  Act.  All  lands  dis- 
posed of  under  the  provisions  of  this  Act  shall 
be  subject  to  all  rights  of  way  which  the  Secre- 
tary of  the  Interior  shall  at  any  time  deem  neces- 
sary for  the  removal  of  the  timber  from  any 
lands  of  class  two. 

Sec.  3.  That  the  classification  provided  for  by 
the  preceding  section  shall  not  operate  to  exclude 
from  exploration,  entry  and  disposition,  under  the 
mineral-land  laws  of  the  United  States,  any  of 
said  lands,  except  power  sites,  which  are  chiefly 
valuable  for  the  mineral  deposits  contained  there- 
in, and  the  general  mineral  laws  are  hereby  ex- 
tended to  all  of  said  lands,  except  power  sites : 
Provided,  That  any  person  entering  mineral  lands 
of  class  two  shall  not  acquire  title  to  the  timber 
thereon,  which  shall  be  sold  as  hereinafter  pro- 
vided in  section  four,  but  he  shall  have  the  right 
to  use  so  much  of  the  timber  thereon  as  may  be 
necessary  in  the  development  and  operation  of 
his  mine  until  such  time  as  such  timber  is  sold  by 
the  United  States. 

Sec.  4.  That  nonmineral  lands  of  class  two  shall 
not  be  disposed  of  until  the  Secretary  of  the  In- 
terior has  determined  and  announced  that  the 
merchantable  timber  thereon  has  been  removed, 
and  thereupon  said  lands  shall  fall  into  class  three 


80' 

and  be  disposed  of  in  the  manner  hereinafter  pro- 
vided for  the  disposal  of  lands  of  that  class. 

The  timber  on  lands  of  class  two  shall  be  sold 
for  cash  by  the  Secretary  of  the  Interior,  in  co- 
operation with  the  Secretary  of  Agriculture,  or 
otherwise,  to  citizens  of  the  United  States,  asso- 
ciates of  such  citizens,  and  corporations  organized 
under  the  laws  of  the  United  States,  or  any  State, 
Territory,  or  District  thereof,  at  such  times,  in 
such  quantities,  and  under  such  plan  of  public 
competitive  bidding  as  in  the  judgment  of  the 
Secretary  of  the  Interior  may  produce  the  best 
results:  Provided,  That  said  Secretary  shall 
have  the  right  to  reject  any  bid  where  he  has  rea- 
son to  believe  that  the  price  offered  is  inadequate, 
and  may  reoffer  the  timber  until  a  satisfactory 
bid  is  received :  Provided  further,  That  upon  ap- 
plication of  a  qualified  purchaser  that  any  legal 
subdivision  shall  be  separately  offered  for  sale 
such  subdivision  shall  be  separately  offered  be- 
fore being  included  in  any  offer  of  a  larger  unit, 
if  such  application  be  filed  within  ninety  days 
prior  to  such  offer:  And  provided  further,  That 
said  timber  shall  be  sold  as  rapidly  as  reasonable 
prices  can  be  secured  therefor  in  a  normal  market. 

The  Secretary  of  the  Interior  shall  as  soon  as 
the  purchase  price  is  fully  paid  by  any  person 
purchasing  under  the  provisions  of  this  section 
issue  to  such  a  purchaser  a  patent  conveying  the 
timber  and  expressly  reserving  the  land  to  the 
United  States.  The  timber  thus  purchased  may 
be  cut  and  removed  by  the  purchaser,  his  heirs  or 
assigns,  within  such  period  as  may  be  fixed  by  the 
Secretary  of  the  Interior,  which  period  shall  be 
designated  in  the  patent;  all  rights  under  said 
patent  shall  cease  and  terminate  at  the  expira- 


81 

tion  of  said  period:  Provided,  That  in  the  event 
the  timber  is  removed  prior  to  the  expiration  of 
said  period  the  Secretary  of  the  Interior  shall 
make  due  announcement  thereof,  whereupon  all 
rights  under  the  patent  shall  cease. 

No  timber  shall  be  removed  until  the  issuance  of 
patent  therefor.  All  timber  sold  under  this  Act 
shall  be  subject  to  the  taxing-  power  of  the  States 
apart  from  the  land  as  soon  as  patents  are  issued 
as  provided  for  herein. 

Sec.  5.  That  nonmineral  lands  of  class  three 
shall  be  subject  to  entry  under  the  general  pro- 
visions of  the  homestead  laws  of  the  United 
States,  except  as  modified  herein,  and  opened  to 
entry  in  accordance  with  the  provisions  of  the 
Act  of  September  thirtieth,  nineteen  hundred  and 
thirteen  (Thirty-eighth  Statutes  at  Large,  page 
one  hundred  and  thirteen).  Fifty  cents  per  acre 
shall  be  paid  at  the  time  the  original  entry  is 
allowed  and  $2  per  acre  when  final  proof  is  made. 
The  provisions  of  section  twenty-three  hundred 
and  one,  Revised  Statutes,  shall  not  apply  to  any 
entry  hereunder  and  no  patent  shall  issue  until 
the  entryman  has  resided  upon  and  cultivated  the 
land  for  a  period  of  three  years,  proof  of  which 
shall  be  made  at  any  time  within  five  years  from 
date  of  entry.  The  area  cultivated  shall  be  such 
as  to  satisfy  the  Secretary  of  the  Interior  that 
the  entry  is  made  in  good  faith  for  the  purpose  of 
settlement  and  not  for  speculation:  Provided, 
That  the  payment  of  $2.50  per  acre  shall  not  be 
required  from  homestead  entrymen  upon  lands  of 
class  two  when  the  same  shall  become  subject  to 
entry  as  agricultural  lands  in  class  three :  Pro- 
vided further,  That  during  the  period  fixed  for  the 


82 

submission  of  applications  to  make  entry  under 
this  section  any  person  duly  qualified  to  enter 
such  lands  who  has  resided  thereon,  to  the  same 
extent  and  in  the  same  manner  as  is  required  un- 
der the  homestead  laws,  since  the  first  day  of  De- 
cember, nineteen  hundred  and  thirteen,  and  who 
has  improved  the  land  and  devoted  some  portion 
thereof  to  agricultural  use,  and  who  shall  have 
maintained  his  residence  to  the  date  of  such  ap- 
plication, shall  have  the  preferred  right  to  enter 
the  quarter  section  upon  which  he  was  so  residing 
whether  such  lands  shall  be  of  class  two  or  class 
three  and  where  such  quarter  section  does  not  con- 
tain more  than  one  million  two  hundred  thousand 
feet  board  measure  of  timber,  and  where  the  quar- 
ter section  contains  more  than  the  said  quantity 
of  timber  such  person  may  enter  the  forty-acre 
tract,  or  lot  or  lots  containing  approximately 
forty  acres,  upon  which  his  improvements,  or  the 
greater  part  thereof,  are  situated :  Provided  fur- 
ther, That  a  prior  exercise  of  the  homestead  right 
by  any  such  person  shall  not  be  a  bar  to  the  exer- 
cise of  such  preference  rights :  And  provided 
further,  That  all  of  the  following  described  lands 
which  may  become  revested  in  the  United  States 
by  operation  of  this  Act,  to-wit:  Township  one 
south,  range  five  east,  sections  twenty-three  and 
thirty-five;  township  one  south,  range  six  east, 
sections  three,  five,  seven,  nine  seventeen,  nine- 
teen, twenty-nine,  thirty-one,  and  thirty-three; 
township  two  south,  range  five  east,  sections  one 
and  three;  township  two  south,  range  six  east, 
sections  one,  three,  five,  seven,  nine,  and  eleven; 
township  two  south,  range  seven  east,  section 
seven;  township  three  south,  range  three  east, 
section  fifteen;  township  four  south,  range  four 


83 

east,  sections  eleven  and  thirteen;  township  four 
south,  range  five  east,  sections  nineteen  and  twen- 
ty-nine; and  township  twelve  south,  range  seven 
west,  sections  fifteen,  twenty-one,  twenty-three, 
twenty-seven,  thirty  three,  and  thirty-five,  Will- 
amette meridian  and  base,  State  of  Oregon,  shall 
be  withheld  from  entry  or  other  disposition  for  a 
period  of  two  years  after  the  approval  hereof. 

Sec.  6.  That  persons  who  purchase  timber  on 
lands  of  class  two  shall  be  required  to  pay  a  com- 
mission of  one-fifth  of  one  per  centum  of  the  pur- 
chase price  paid,  to  be  divided  equally  between 
the  register  and  receiver,  within  the  maximum 
compensation  allowed  them  by  law;  and  the  reg- 
ister and  receiver  shall  receive  no  other  compensa- 
tion whatever  for  services  rendered  in  connection 
with  the  sales  of  timber  under  the  provisions  of 
section  four  of  this  Act. 

Sec.  7.  That  the  Attorney  General  of  the 
United  States  be,  and  he  is  hereby,  authorized  and 
directed  to  institute  and  prosecute  any  and  all 
suits  in  equity  and  actions  at  law  against  the  Ore- 
gon and  California  Railroad  Company,  and  any 
other  proper  party  which  he  may  deem  appropri- 
ate, to  have  determined  the  amount  of  moneys 
which  have  been  received  by  the  said  railroad 
company  or  its  predecessors  from  or  on  account 
of  any  of  said  granted  lands,  whether  sold  or  un- 
sold, patented  or  unpatented,  and  which  should  be 
charged  against  it  as  a  part  of  the  "full  value" 
secured  to  the  grantees  under  said  granting  Acts 
as  heretofore  interpreted  by  the  Supreme  Court. 
In  making  this  determination  the  court  shall  take 
into  consideration  and  give  due  and  proper  legal 


84 

effect  to  all  receipts  of  money  from  sales  of  land 
or  timber,  forfeited  contracts,  rent,  timber  depre- 
dations, and  interest  on  contracts,  or  from  any 
other  source  relating  to  said  lands ;  also  to  the 
value  of  timber  taken  from  said  lands  and  used  by 
said  grantees  or  their  successor  or  successors,  hi 
making  this  determination  in  the  aforementioned 
suit  or  suits  the  court  shall  also  determine,  on  the 
application  of  the  Attorney  General,  the  amount 
of  the  taxes  on  said  lands  paid  by  the  United 
States,  as  provided  in  this  Act,  and  which  should 
in  law  have  been  paid  by  the  said  Oregon  and 
California  Railroad  Company,  and  the  amount 
thus  determined  shall  be  treated  as  money  re- 
ceived by  said  railroad  company. 

Sec.  8.  That  the  title  to  all  money  arising  out  of 
said  grant  lands  and  now  on  deposit  to  await  the 
final  outcome  of  said  suit  commenced  by  the 
United  States  in  pursuance  of  said  joint  resolu- 
tion of  nineteen  hundred  and  eight  is  hereby  vest- 
ed in  the  United  States,  and  the  United  States  is 
subrogated  to  all  the  rights  and  remedies  of  the 
obligee  or  obligees,  and  especially  of  Louis  L. 
Sharp,  as  commissioner,  under  any  contract  for 
the  purchase  of  timber  on  the  grant  lands. 

Sec.  9.  That  the  taxes  accrued,  and  now  unpaid 
on  the  lands  revested  in  the  United  States,  whether 
situate  in  the  State  of  Oregon  or  State  of  Wash- 
ington, shall  be  paid  by  the  Treasurer  of  the  Unit- 
ed States,  upon  the  order  of  the  Secretary  of  the 
Interior,  as  soon  as  may  be  after  the  approval  of 
this  Act,  and  a  sum  sufficient  to  make  such  pay- 
ment is  hereby  appropriated,  out  of  any  money  in 
the  Treasury  not  otherwise  appropriated. 


85 

Sec.  10.  That  all  moneys  received  from  or 
on  account  of  said  lands  and  timber  un- 
der the  provisions  of  this  Act  shall  be  de- 
posited in  the  Treasury  of  the  United 
States  in  a  special  fund,  to  be  designated 
"The  Oregon  and  California  land-grant  fund," 
which  fund  shall  be  disposed  of  in  the  following 
manner :  The  Secretary  of  the  Interior  shall  ascer- 
tain as  soon  as  may  be  the  exact  number  of  acres 
of  said  lands,  sold  or  unsold,  patented  to  the  Ore- 
gon and  California  Railroad  Company,  or  its 
predecessors,  and  the  number  of  acres  of  unpat- 
ented lands  which  said  railroad  company  is  enti- 
tled to  receive  under  the  terms  of  said  grants  and 
the  value  of  said  lands  at  $2.50  per  acre.  From 
the  sum  thus  ascertained  he  shall  deduct  the 
amount  already  received  by  the  said  railroad  com- 
pany and  its  predecessors  in  interest  on  account 
of  said  lands  and  which  should  be  charged  against 
it  as  determined  under  section  seven  of  this  Act; 
and  a  sum  equal  to  the  balance  thus  resulting  shall 
be  paid,  as  herein  provided,  to  the  said  railroad 
company,  its  successors  or  assigns,  and  to  those 
having  liens  on  the  land,  as  their  respective  in- 
terests may  appear.  The  amount  due  lien  holders 
shall  be  evidenced  either  by  the  consent,  in  writ- 
ing, of  the  railroad  company  or  by  a  judgment  of 
a  court  of  competent  jurisdiction  in  a  suit  to 
which  the  railroad  company  and  the  lien  holders 
are  parties.  Payments  shall  be  made  from  time 
to  time,  as  the  fund  accumulates,  by  the  Treasurer 
of  the  United  States  upon  the  order  of  the  Secre- 
tary of  the  Interior:  Provided,  however,  That  if, 
upon  the  expiration  of  ten  years  from  the  ap- 
proval of  this  Act,  the  proceeds  derived  from  the 
sale  of  lands  and  timber  are  not  sufficient  to  pay 


the  full  amount  which  the  said  railroad  company, 
its  successors  or  assigns,  are  entitled  to  receive, 
the  balance  due  shall  be  paid  from  the  general 
funds  in  the  Treasury  of  the  United  States,  and 
an  appropriation  shall  be  made  therefor.  After 
the  said  railroad  company,  its  successors  or  as- 
signs, and  the  lien  holders  shall  have  been  paid 
the  amount  to  which  they  are  entitled,  as  provid- 
ed herein,  an  amount  equal  to  that  paid  for  ac- 
cumulated taxes,  as  provided  in  section  nine  here- 
of, shall  be  deposited  in  the  Treasury  to  the  credit 
of  the  United  States,  thereafter  all  other  moneys 
received  from  the  sales  of  land  and  timber  shall 
be  distributed  as  follows : 

A  separate  account  shall  be  kept  in  the  General 
Land  Office  of  the  sales  of  land  and  timber  within 
each  county  in  which  any  of  said  lands  are  sit- 
uated, and,  after  deducting  from  the  amount  of 
the  proceeds  arising  from  such  sales  in  each 
county  a  sum  equal  to  that  applied  to  pay  the  ac- 
crued taxes  in  that  county  and  a  sum  equal  to 
$2.50  per  acre  for  each  acre  of  such  land  therein 
title  to  which  is  revested  in  the  United  States  un- 
der this  Act,  twenty-five  per  centum  of  the  re- 
mainder shall  be  paid  to  the  State  treasurer  of 
the  State  in  which  the  land  is  located,  to  be  and 
become  a  part  of  the  irreducible  school  fund  of 
the  State;  twenty-five  per  centum  shall  be  paid 
to  the  treasurer  of  the  county  for  common  schools, 
roads,  highways,  bridges,  and  port  districts,  to  be 
apportioned  by  the  county  courts  for  the  several 
purposes  above  named ;  forty  per  centum  shall  be 
paid  into,  reserved,  and  appropriated  as  a  part  of 
the  fund  created  by  the  Act  of  Congress  approved 
June  seventeenth,  nineteen  hundred  and  two, 
known  as  the  reclamation  Act;    ten   per   centum 


87 

shall  become  a  part  of  the  general  fund  in  the 
Treasury  of  the  United  States ;  and  of  the  balance 
remaining  in  said  Oregon  and  California  land 
grant  fund  from  whatsoever  source  derived  twen- 
ty-five per  centum  shall  be  paid  to  the  State  treas- 
urer of  the  State  in  which  the  land  is  located,  to 
be  and  become  a  part  of  the  irreducible  school 
fund  of  the  State ;  twenty-five  per  centum  shall  be 
paid  to  the  treasurer  of  the  county  for  common 
schools,  roads,  highways,  bridges,  and  port  dis- 
tricts, to  be  apportioned  by  the  county  courts  for 
the  several  purposes  above  named;  and  the  re- 
mainder shall  become  a  part  of  the  general  fund 
in  the  Treasury  of  the  United  States.  The  pay- 
ments herein  authorized  shall  be  made  to  the 
treasurers  of  the  States  and  counties,  respective- 
ly, by  the  Treasurer  of  the  United  States,  upon 
the  order  of  the  Secretary  of  the  Interior,  as  soon 
as  may  be  after  the  close  of  each  fiscal  year  dur- 
ing which  the  moneys  were  received:  Provided, 
That  none  of  the  payments  to  the  States  and  coun- 
ties and  to  the  reclamation  fund  in  this  section 
provided  for  shall  be  made  until  the  amount  due 
the  Oregon  and  California  Railroad  Compny,  its 
successors  or  assigns,  has  been  fully  paid,  and  the 
Treasury  reimbursed  for  all  taxes  paid  pursuant 
to  the  provisions  of  section  nine  of  this  Act. 

Sec.  11.  That  the  Secretary  of  the  Interior  is 
hereby  authorized  to  perform  any  and  all  acts  and 
to  make  such  rules  and  regulations  as  may  be  nec- 
essary and  proper  for  the  purpose  of  carrying  the 
provisions  of  this  Act  into  full  force  and  effect ; 
and  any  person,  applicant,  purchaser,  entryman, 
or  witness  who  shall  swear  falsely  in  any  affidavit 
or   proceeding   required   hereunder  or  under  the 


88 

regulations  issued  by  the  Secretary  of  the  In- 
terior shall  be  guilty  of  perjury  and  liable  to  the 
penalties  prescribed  therefor. 

Sec.  12.  That  the  sum  of  $100,000  be,  and  the 
same  is  hereby,  appropriated,  out  of  any  moneys 
in  the  Treasury  not  otherwise  appropriated,  to 
enable  the  Secretary  of  the  Interior,  in  coopera- 
tion with  the  Secretary  of  Agriculture,  or  other- 
wise, to  complete  the  classification  of  the  lands  as 
herein  provided,  which  amount  shall  be  immedi- 
ately available  and  shall  remain  available  until 
such  classification  shall  have  been  completed. 

Approved,  June  9,  1916. 


No.  1(BP  492 

No.  2TB4 


(Eirruti  (Eoitrt  of  AppMa 

Jar  tip  Nttittj  GItrrmt. 


OREGON    AND    CALIFORNIA    RAILROAD    COM- 
PANY, a  Corporation,  et  al., 

Defendants  and  Appellants, 


vs. 
UNITED  STATES  OF  AMERICA, 


Appellee. 


Upon  Appeal  from  the  District  Court  of  the  United 

States  for  the  District  of  Oregon,  from  the 

Decree  Entered  December  9,  1915. 


Certificate  of  the  United  States  Circuit  Court  of  Appeals 

for  the  Ninth  Circuit,  Certifying  Certain  Questions 

or  Propositions  of  Law  to  the  Supreme  Court 

of  the  United  States,  Under  Section  239 

of  the  Judicial  Code  (36  Stat.  1157). 


No.  2754 


(ftirrmi  (tort  of  Apjrcate 


Jor  %  Nmtff  GlimttL 


OREGON    AND    CALIFORNIA    RAILROAD    COM- 
PANY, a  Corporation,  et  al., 

Defendants  and  Appellants, 


vs. 
UNITED  STATES  OF  AMERICA, 


Appellee. 


Upon  Appeal  from  the  District  Court  of  the  United 

States  for  the  District  of  Oregon,  from  the 

Decree  Entered  December  9,  1915. 


Oregon  dc  California  R.  R.  Co.  et  al. 


Names  and  Addresses  of  Solicitors  upon  This 

Appeal. 

For  Appellants,   Oregon  and  California  Railroad 
Company,  et  al. : 
WM.  F.  HEREIN,  San  Francisco,  Cal. 
P.  F.  DUNNE,  San  Francisco,  Cal. 
WM.  D.  FENTON,  Portland,  Oregon. 

For  Appellant,  Union  Trust  Company: 

DOLPH,   MALLORY,    SIMON   &  GEARIN, 

Portland,  Oregon. 
MILLER,  KING,  LANE  &  TRAFFORD  and 

JOHN  C.  SPOONER,  New  York. 

For  Appellee : 

THOMAS  W.  GREGORY,  Attorney-General, 
JOHN  W.  DAVIS,  Solicitor-General. 
CONSTANTINE  J.  SMYTH,  Special  Assist- 
ant to  Attorney-General. 
CLARENCE  L.  REAMES,  United  States  Dis- 
trict Attorney  for  Oregon. 


vs.  United  States  of  America.  .  3 

Certificate  of  the  United  States  Circuit  Court  of 
Appeals  for  the  Ninth  Circuit  Certifying  Cer- 
tain Questions  or  Propositions  of  Law  to  the  Su- 
preme Court  of  the  United  States,  Under  Sec- 
tion 239  of  the  Judicial  Code  (36  Stat.,  1157). 
In  this  case,  this  Court  heretofore,  under  Section 
239  of  the  Judicial  Code,  certified  to  the  Supreme 
Court   of  the  United   States   certain   questions   or 
propositions  of  law  concerning  which  it  desired  the 
instruction  of  that  court  for  its  proper  decision ;  and 
thereupon   the    Supreme   Court   required  that   the 
whole  record  and  cause  be  sent  up  to  it  for  its  con- 
sideration,  and   the    same   having   been   done,   the 
Supreme  Court  decided  the  whole  matter  in  contro- 
versy as  appears  from  the  decision  of  the  court  re- 
ported in  238  U.  S.  at  pages  393-439. 

On  December  8th,  1915,  the  mandate  of  the 
Supreme  Court  was  filed  in  the  District  Court,  as 
follows : 

"MANDATE  OF  UNITED  STATES  SUPREME 

COURT. 

United  States  of  America, — ss. 
The  President  of  the  United  States  of  America,  to 
the  Honorable,  the  JTudges  of  the  District  Court 
of  the  United  States  for  the  District  of  Oregon, 
Greeting : 
(Seal,  United  States  Supreme  Court) 

WHEREAS,  lately  in  the  District  Court  of  the 
United  States,  for  the  District  of  Oregon,  before 
you,  or  some  of  you,  in  a  cause  between  The  United 
States  of  America,  complainant,  and  Oregon  &  Cali- 


4  Oregon  &  California  R.  R.  Co.  et  al. 

fornia  Railroad  Company,  Southern  Pacific  Com- 
pany, Stephen  T.  Gage,  individually  and  as  trustee, 
Union  Trust  Company,  individually  and  as  trustee, 
John  L.  Snyder  et  al.,  defendants;  John  L.  Snyder, 
Julius  F.  Prahl,  Albert  E.  Thompson  et  al.,  com- 
plainants, and  Oregon  &  California  Railroad  Com- 
pany, Union  Trust  Company,  and  S.  T.  Gage, 
defendants,  in  cross-complaint,  and  William  F. 
Slaughter  et  al.,  interveners,  in  Equity,  No.  3340, 
wherein  the  decree  of  the  said  District  Court  entered 
in  said  cause  on  the  1st  day  of  July,  A.  D.  1913,  is 
in  the  following  words,  viz. : 

(Here  follows  copy  of  said  decree  of  said  Dis- 
trict Court,  as  the  same  is  contained  in  Volume 
III,  pages  1296-1550  of  printed  transcript  of 
the  record  on  the  former  appeals  taken  in  this 
case  from  said  decree  of  July  1,  1913,  and  which 
said  transcript  of  the  record  is  on  file  in  the 
clerk 's  office  of  the  Circuit  Court  of  Appeals  for 
the   Ninth   Circuit,   the   case   being   numbered 
therein  2400,  and  in  the  clerk's  office  of  the 
Supreme  Court  of  the  United  States,  the  case  in 
the  latter  court  being  numbered  679,  October 
Term,  1914.) 
as  by  the  inspection  of  the  transcript  of  record  of 
the  United  States  Circuit  Court  of  Appeals  for  the 
Ninth  Circuit,  which  was  brought  into  the  Supreme 
Court  of  the  United  States  by  virtue  of  a  writ  of 
certiorari  agreeably  to  the  act  of  Congress  in  such 
case  made  and  provided,  fully  and  at  large  appears. 
AND  WHEREAS,  in  the  present  term  of  Octo- 
ber, in  the  year  of  our  Lord  one  thousand  nine  hun- 


vs.  United  States  of  America.  5 

dred  and  fourteen,  the  said  cause  came  on  to  be 
heard  before  the  said  SUPREME  COURT,  on  the 
said  transcript  of  record,  and  was  argued  by  coun- 
sel: 

OX  CONSIDERATION  WHEREOF,  it  is  now 
here  ordered,  adjudged,  and  decreed  by  this  Court 
that  the  decree  of  the  District  Court  of  the  United 
States  for  the  District  of  Oregon  in  this  cause  be, 
and  the  same  is  hereby,  reversed. 

AND  IT  IS  FURTHER  ORDERED  that  this 
cause  be,  and  the  same  is  hereby,  remanded  to  the 
said  District  Court  for  further  proceedings  in  ac- 
cordance with  the  opinion  of  this  Court. 

June  21,  1915. 

You,  therefore,  are  hereby  commanded  that  such 
further  proceedings  be  had  in  said  cause,  in  con- 
formity with  the  opinion  and  decree  of  this  Court, 
as  according  to  right  and  justice,  and  the  laws  of  the 
United  States,  ought  to  be  had,  the  said  writ  of  cer- 
tiorari notwithstanding. 

Witness  the  Honorable  EDWARD  D.  WHITE, 
Chief  Justice  of  the  United  States,  the  7th  day  of 
August  in  the  year  of  our  Lord  one  thousand  nine 
hundred  and  fifteen. 

JAMES  D.  MAHER, 
Clerk  of  the  Supreme  Court  of  the  United  States." 

Thereupon,  and  on  December  8th,  1915,  the  fol- 
lowing proceedings  were  had,  and  the  same  were 
embodied  in  a  statement  of  the  case,  approved  by  the 
Judge  of  the  District  Court — such  statement  and  the 
order  approving  the  same,  being  as  follows : 


6  Oregon  &  California  B.  R.  Co.  et  al. 

"STATEMENT  OF  THE  CASE. 

Be  it  remembered  that  on  the  8th  day  of  Decem- 
ber, 1915,  the  above  cause,  No.  3340,  in  Equity,  came 
on  for  hearing  before  the  above-named  court  upon  the 
form  of  the  decree  to  be  entered  therein  under  and  in 
pursuance  of  the  mandate  theretofore  issued  from  the 
Supreme  Court  of  the  United  States  on  the  opinion 
and  decree  of  said  Supreme  Court  reversing  the  de- 
cree made  and  entered  by  the  above-entitled  court,  in 
said  cause,  on  the  first  day  of  July,  1913,  and  re- 
manding the  cause  for  further  proceedings  in  ac- 
cordance with  said  opinion.  Mr.  Constantine  J. 
Smyth,  special  assistant  to  the  Attorney-General, 
and  Mr.  Clarence  L.  Reames,  United  States  District 
Attorney  for  the  District  of  Oregon,  represented  the 
complainant.  Mr.  Peter  F.  Dunne  and  Mr.  Wm.  D. 
Fenton  represented  the  defendants,  Oregon  and  Cali- 
fornia Railroad  Company,  Southern  Pacific  Com- 
pany and  Stephen  T.  Gage,  individually  and  as 
trustee,  and  Mr.  John  M.  Gearin,  represented  the 
defendant,  Union  Trust  Company  of  New  York,  in- 
dividually and  as  trustee,  and  the  cross-complainants 
and  interveners  in  said  cause  were  represented  by 
their  respective  counsel,  Mr.  A.  W.  Lafferty  and  Mr. 
L.  C.  Garrigus. 

On  motion  of  counsel  for  the  complainant,  the 
Court  ordered  that  said  mandate  of  the  Supreme 
Court  be  filed  and  the  same  was  thereupon  filed  with 
the  clerk  of  this  court. 

The  complainant,  through  its  counsel,  then  sub- 
mitted to  the  Court  the  following  form  of  decree  as 


vs.  United  States  of  America.  7 

being  in  conformity  with  said  opinion  and  mandate 
of  the  Supreme  Court  of  the  United  States,  viz. : 

'In  the  District  Court  of  the  United  States,  for  the 
District  of  Oregon. 

THE  UNITED  STATES  OF  AMERICA, 

Complainant, 

vs. 

OREGON     AND     CALIFORNIA     RAILROAD 
COMPANY  et  al., 

Defendants, 
JOHN  L.  SNYDER  et  al., 

Defendants  and  Cross-Complainants, 
WILLIAM  F.  SLAUGHTER  et  al., 

Interveners. 
DECREE. 

In  pursuance  of  the  mandate  of  the  Supreme  Court 

of  the  United  States  filed  in  this  court  on  the 

day  of in  the  above-entitled  cause,  counsel 

for  the  respective  parties  being  present,  it  is  by  the 
Court  ordered,  adjudged  and  decreed  as  follows: 

1.  That  the  decree  heretofore  entered  in  said 
cause  so  far  as  it  affects  the  defendants,  Oregon 
and  California  Railroad  Company,  Southern  Pacific 
Company,  Stephen  T.  Gage,  individually  and  as  trus- 
tee, Union  Trust  Company,  individually  and  as  trus- 
tee, hereinafter  called  "the  defendants,"  be,  and  the 
same  is  hereby,  set  aside  and  held  for  naught,  but 
is  adhered  to  in  all  respects  as  to  the  defendants  and 
cross-complainants,  hereinafter  called  the   "cross- 


8  Oregon  &  California  R.  R.  Co.  et  al. 

complainants,"  and  the  interveners. 

2.  That  the  defendants  and  their  respective  offi- 
cers and  agents  be,  and  each  is  hereby,  enjoined  from 
selling  the  lands  or  any  part  thereof  granted  either 
by  the  Act  of  Congress  approved  July  25,  1866,  as 
amended  by  the  Act  of  Congress  of  April  10,  1869, 
or  by  the  Act  of  Congress  approved  May  4,  1870, 
whether  the  said  lands  be  situated  within  the  place 
or  indemnity  limits  of  the  grants  thereby  made,  to 
any  person  not  an  actual  settler  on  the  land  sold  to 
him,  or  in  quantities  greater  than  one-quarter  sec- 
tion to  one  purchaser,  or  for  a  price  exceeding  $2.50 
per  acre ;  and  from  selling  any  of  the  timber  on  said 
lands,  or  any  mineral  or  other  deposits  therein,  ex- 
cept as  a  part  of  and  in  conjunction  with  the  land 
on  which  the  timber  stands  or  in  which  the  mineral 
or  other  deposits  are  found;  and  from  cutting  or  re- 
moving or  authorizing  the  cutting  or  removal  of  any 
of  the  timber  thereon ;  or  from  removing  or  author- 
izing the  removal  of  mineral  or  other  deposits 
therein,  except  in  connection  with  the  sale  of  the 
land  bearing  the  timber  or  containing  the  mineral 
or  other  deposits. 

3.  That  the  defendants  and  their  respective  offi- 
cers and  agents  be,  and  each  is  hereby,  enjoined  from 
making  or  agreeing  to  make,  either  directly  or  in- 
directly, any  disposition  whatsoever  of  said  lands 
or  of  any  part  thereof,  or  of  the  timber  thereon  or 
any  part  thereof,  or  of  any  mineral  or  other  deposits 
therein;  from  cutting,  removing,  or  authorizing  the 
cutting  or  removal  of  the  timber  thereon  or  any  part 
thereof;  and  from  removing  or  authorizing  the  re- 


vs.  United  States  of  America.  9 

moval  of  mineral  or  other  deposits  therein;  from 
disposing  of,  receiving  or  exerting  any  control  over 
any  money  which  arose,  or  may  hereafter  arise,  from 
said  lands,  either  through  sales  thereof  or  of  timber 
thereon,  or  through  condemnation  proceedings  or 
otherwise,  and  now  on  deposit,  or  which  may  here- 
after be  placed  on  deposit,  with  any  bank,  clerk  of 
court,  or  other  institution  or  person,  to  await  the 
final  decision  of  the  Supreme  Court  of  the  United 
States  in  this  case,  until  Congress  shall  have  a  rea- 
sonable opportunity  to  make  provision  by  legisla- 
tion for  the  disposition  of  said  lands,  timber,  money, 
mineral  or  other  deposits,  in  accordance  with  such 
policy  as  Congress  may  deem  fitting,  under  the  cir- 
cumstances, and  at  the  same  time  secure  to  the  de- 
fendant all  the  value  that  the  said  granting  acts  con- 
ferred upon  the  grantees. 

4.  That  if  Congress  does  not  make  provision  for 
the  disposition  as  aforesaid  of  said  lands,  money, 
timber,  mineral  or  other  deposits,  the  defendants 
may  apply  to  the  Court  within  a  reasonable  time,  but 
not  less  than  six  months  from  the  entry  of  this  de- 
cree, for  a  modification  of  so  much  of  the  injunction 
herein  ordered  as  forbids  any  disposition  of  the  said 
lands,  timber,  money,  mineral  or  other  deposits,  or 
any  part  thereof,  until  Congress  shall  act,  and  the 
Court  hereby  reserves  the  right  to  modify  this  decree 
in  that  regard  if,  in  its  opinion,  good  cause  shall 
then  exist  for  doing  so. 

5.  That  this  decree  shall  apply  not  only  to  all  said 
grant  lands  unsold  at  the  time  this  action  was  insti- 
tuted, but  also  to  all  such  grant  lands  sold  prior  to 


10         Oregon  &  California  R.  R.  Co.  et  al. 

the  institution  of  the  action  which  have  since  re- 
verted or  shall  hereafter  revert  to  the  defendants 
or  any  one  of  them. 

6.  That  the  complainant  shall  have  the  right  to 
apply  to  the  Court  at  any  time  hereafter  for  an  ac- 
counting as  to  all  moneys  received  by  the  defendant 
from  or  on  account  of  the  lands  covered  by  said  grant- 
ing acts,  and  the  Court  retains  jurisdiction  over  the 
action  for  the  purpose  of  granting  such  application 
if  good  cause  therefor  appears. 

7.  That  this  decree  shall  be  without  prejudice  to 
any  other  suits,  rights  or  remedies  which  the  govern- 
ment may  have  by  law  or  under  the  Joint  Resolution 
of  Congress  passed  April  30,  1908,  or  under  the  Act 
of  Congress  passed  August  20,  1912. 

8.  That  the  complainant  have  and  recover  from 
the  defendants,  Oregon  and  California  Railroad 
Company,  Southern  Pacific  Company,  Stephen  T. 
Gage,  Union  Trust  Company,  the  cross-complainants 
and  interveners,  and  each  of  them,  its  lawful  costs 

and  disbursements  herein,  taxed  at  $ ,  and  that 

execution  issue  therefor. 

Done  in  open  court  this  day  of  December, 

1915. 

BY  THE  COURT, 


Judge. ' 
And  the  counsel  for  the  complainants  asked  the 
Court  to  adopt  the  aforesaid  form  of  decree  sub- 
mitted by  them  as  the  form  of  decree  to  be  entered 
upon  said  mandate. 


vs.  United  States  of  America.  11 

The  defendants,  Oregon  and  California  Railroad 
Company,  Southern  Pacific  Company,  Stephen  T. 
Gage,  individually  and  as  trustee,  and  the  defend- 
ant, Union  Trust  Company  of  New  York,  individ- 
ually and  as  trustee,  then  submitted  to  the  Court  the 
following  form  of  decree  as  being  in  conformity  with 
said  opinion  and  mandate  of  the  Supreme  Court  of 
the  United  States,  viz. : 

1  [Title  of  Court  and  Cause  as  contained  in  foregoing 
Form  of  Decree  submitted  by  the  Complain- 
ant.] 
In  pursuance   of  the  mandate   of   the   Supreme 
Court  of  the  United  States,  filed  in  this  court  on 
the   day   of   December,    1915,    in   the   above- 
entitled  cause,  counsel  for  the  respective  parties  be- 
ing present,  it  is  by  the  Court  ordered,  adjudged  and 
decreed,  as  follows : 

1.  That  the  decree  heretofore  entered  in  said 
cause,  so  far  as  it  affects  the  defendants  Oregon  and 
California  Railroad  Company,  Southern  Pacifie 
Company,  Stephen  T.  Gage,  individually  and  as 
trustee,  Union  Trust  Company,  individually  and  as 
trustee,  hereinafter  called  the  "defendants,"  be,  and 
the  same  is  hereby  set  aside,  and  held  for  naught,  but 
adhered  to  in  all  respects  as  to  the  defendant,  and 
cross-complainants,  hereinafter  called  the  "cross- 
complainants,"  and  the  "interveners." 

2.  That  the  said  defendants  and  their  respective 
officers  and  agents  be  and  each  is  hereby  enjoined 
from  selling  the  lands,  or  any  part  thereof,  granted 
either  by  the  Act  of  Congress  approved  July  25, 


12         Oregon  &  California  R.  R.  Co.  et  al. 

1866,  as  amended  by  the  Act  of  Congress  of  April  10, 

1869,  or  by  the  Act  of  Congress  approved  May  4, 

1870,  whether  the  said  lands  be  situated  within  the 
place  or  indemnity  limits  of  the  grants  thereby 
made,  to  any  person  not  an  actual  settler,  or  in  quan- 
tities greater  than  one-quarter  section  to  one  pur- 
chaser, or  for  a  price  exceeding  two  dollars  and  a 
half  ($2.50)  per  acre. 

3.  That  the  said  defendants  and  their  respective 
officers  and  agents  be,  and  each  is  hereby  enjoined 
from  any  disposition  of  the  said  lands,  or  any  part 
thereof,  or  of  the  timber  thereon,  and  from  cutting, 
or  authorizing  the  cutting,  or  removal  of  any  of  the 
timber  thereon,  until  Congress  shall  have  a  reason- 
able opportunity  to  provide  by  legislation  for  the 
disposition  of  said  lands,  in  accordance  with  such 
(policy  as  it  may!  deem  fitting  under  the  circum- 
stances, and  at  the  same  time  secure  to  the  defend- 
ants, all  the  value  the  granting  acts  conferred  upon 
the  grantees;  but  of  Congress  does  not  make  such 
provision,  the  defendants  may  apply  to  this  Court, 
within  a  reasonable  time,  not  less  than  six  (6) 
months  from  the  entry  of  the  decree  herein,  for  a 
modification  of  so  much  of  the  injunction  herein 
ordered  as  enjoins  any  disposition  of  the  lands  and 
timber  until  Congress  shall  act. 

Done  in  open  court  this  day  of  , 

1915, 

BY  THE  COURT, 

Judge. ' 


vs.  United  States  of  America.  13 

And  the  counsel  for  said  defendants  asked  the 
Court  to  sign  and  to  order  the  entry  of  a  decree  in 
the  form  submitted  by  them  as  being  the  proper 
form  of  decree  to  be  entered  upon  said  mandate. 

After  arguments  had  by  the  respective  counsel, 
the  Court  took  under  advisement  the  matter  of  the 
form  of  the  decree  to  be  entered  upon  said  mandate ; 
and  on  the  9th  day  of  December,  1915,  the  Honor- 
able Charles  E.  Wolverton,  Judge  of  this  Court, 
presiding  on  the  aforesaid  hearing,  signed  the  fol- 
lowing form  of  decree,  viz. : 

1  [Title  of  Court  and  Cause  as  contained  in  foregoing 
Form  of  Decree  submitted  by  the  Complain- 
ant.] 
In  pursuance   of  the  mandate   of   the   Supreme 
Court  of  the  United  States,  filed  in  this  court  on 
the    8th    day    of    December,    1915,    in    the   above- 
entitled  cause,  counsel  for  the  respective  parties  be- 
ing present,  it  is  by  the  Court  ordered,  adjudged  and 
decreed,  as  follows : 

1.  That  the  decree  heretofore  entered  in  said 
cause,  so  far  as  it  affects  the  defendants  Oregon  and 
California  Railroad  Company,  Southern  Pacific 
Company,  Stephen  T.  Gage,  individually  and  as 
trustee,  Union  Trust  Company,  individually  and  as 
trustee,  hereinafter  called  "the  defendants,"  be,  and 
the  same  is  hereby  set  aside,  and  held  for  naught,  but 
adhered  to  in  all  respects  as  to  the  defendant,  and 
cross-complainants,  hereinafter  called  the  "cross- 
complainants,"  and  the  interveners. 

2.  That  the  defendants  and  their  respective  offi- 
cers and  agents  be,  and  each  is  hereby,  enjoined 


14         Oregon  &  California  R.  E.  Go.  et  al. 

from  selling  the  lands  or  any  part  thereof  granted 
either  by  the  Act  of  Congress  approved  July  25, 
1866,  as  amended  by  the  Act  of  Congress  of  April 
10,  1869,  or  by  the  Act  of  Congress  approved  May  4, 
1870,  whether  the  said  lands  be  situated  within  the 
place  or  indemnity  limits  of  the  grants  thereby 
made,  to  any  person  not  an  actual  settler  on  the  land 
sold  to  him,  or  in  quantities  greater  than  one- 
quarter  section  to  one  purchaser,  or  for  a  price  ex- 
ceeding $2.50  per  acre:  and  from  selling  any  of  the 
timber  on  said  lands,  or  any  mineral  or  other  de- 
posits therein,  except  as  a  part  of  and  in  conjunc- 
tion with  the  land  on  which  the  timber  stands  or  in 
which  the  mineral  or  other  deposits  are  found;  and 
from  cutting  or  removing  or  authorizing  the  cutting 
or  removal  of  any  of  the  timber  thereon ;  or  from  re- 
moving or  authorizing  the  removal  of  mineral  or 
other  deposits  therein,  except  in  connection  with  the 
sale  of  the  land  bearing  the  timber  or  containing  the 
mineral  or  other  deposits. 

3.  That  the  defendants  and  their  respective  offi- 
cers and  agents  be,  and  each  is  hereby,  enjoined 
from  making  or  agreeing  to  make,  either  directly  or 
indirectly,  any  disposition  whatsoever  of  said  lands 
or  of  any  part  thereof,  or  of  the  timber  thereon  or 
any  part  thereof,  or  of  any  mineral  or  other  deposits 
therein;  from  cutting,  removing,  or  authorizing  the 
cutting  or  removal  of  the  timber  thereon  or  any  part 
thereof;  from  removing  or  authorizing  the  removal 
of  mineral  or  other  deposits  therein;  and  from  dis- 
posing of,  receiving  or  exerting  any  control  over  any 
money  which  arose,  or  may  hereafter  arise,  from 


vs.  United  States  of  America.  15 

said  lands,  either  through  sales  thereof  or  of  timber 
thereon,  or  through  condemnation  proceedings  or 
otherwise,  and  now  on  deposit,  or  which  may  here- 
after be  placed  on  deposit,  with  any  bank,  clerk  of 
court,  or  other  institution  or  person,  to  await  the 
final  decision  of  the  Supreme  Court  of  the  United 
States  in  this  case,  until  Congress  shall  have  a  rea- 
sonable opportunity  to  make  provision  by  legisla- 
tion for  the  disposition  of  said  lands,  timber,  money, 
mineral  or  other  deposits,  in  accordance  with  such 
policy  as  Congress  may  deem  fitting,  under  the  cir- 
cumstances, and  at  the  same  time  secure  to  the  de- 
fendant all  the  value  that  the  said  granting  acts 
conferred  upon  the  grantees. 

4.  That  if  Congress  does  not  make  provision  for 
the  disposition  as  aforesaid  of  said  lands,  money, 
timber,  mineral  or  other  deposits,  the  defendants 
may  apply  to  the  Court  within  a  reasonable  time, 
but  not  less  than  six  months  from  the  entry  of  this 
decree,  for  a  modification  of  so  much  of  the  injunc- 
tion herein  ordered  as  forbids  any  disposition  of  the 
said  lands,  timber,  money,  mineral  or  other  deposits, 
or  any  part  thereof,  until  Congress  shall  act,  and  the 
court  hereby  reserves  the  right  to  modify  this  de- 
cree in  that  regard  if,  in  its  opinion,  good  cause  shall 
then  exist  for  doing  so. 

5.  That  this  decree  shall  apply  not  only  to  all 
said  grant  lands  unsold  at  the  time  this  action  was 
instituted,  but  also  to  all  such  grant  lands  sold  prior 
to  the  institution  of  the  action  which  have  since 
reverted  or  shall  hereafter  revert  to  the  defendants 
or  any  one  of  them. 


16  Oregon  &  California  R.  R.  Co.  et  al. 

6.  That  this  decree  shall  be  without  prejudice 
to  any  other  suits,  rights  or  remedies  which  the 
Government  may  have  by  law  or  under  the  Joint 
Resolution  of  Congress  passed  April  30,  1908,  or 
under  the  Act  of  Congress  passed  August  30,  1912, 
against  the  defendants  or  any  of  them. 

7.  That  the  complainant  have  and  recover  from 
the  defendants,  Oregon  and  California  Eailroad 
Company,  Southern  Pacific  Company,  Stephen  T. 
Gage,  individually  and  as  trustee,  and  Union  Trust 
Company,  individually  and  as  trustee,  and  each  of 
them,  its  lawful  costs  and  disbursements  herein, 
taxed  at  $6,249.02,  and  that  execution  issue  therefor. 

Done  in  open  court  this  9th  day  of  December,, 
1915. 

BY  THE  COURT, 
(Signed)   CHARLES  E.  WOLVERTON, 

Judge. ' 

And  said  decree  was  thereupon  on  said  9th  day 
of  December,  1915,  entered  as  the  judgment  and  de- 
cree of  this  Court. 

The  defendants,  Oregon  and  California  Railroad 
Company,  Southern  Pacific  Company,  Stephen  T. 
Gage,  individually  and  as  trustee,  and  Union  Trust 
Company  of  New  York,  individually  and  as  trustee, 
duly  excepted  to  the  entry  of  said  form  of  decree  last 
mentioned,  and  also  to  the  failure  of  said  Judge  to 
sign  a  decree  in  the  aforesaid  form  submitted  by 
them. 

Said  defendants  now  present  to  the  Court  this  their 
Statement  of  the  Case,  and  ask  the  Court  to  approve 
of  the  same  and  to  direct  that  it  be  filed  in  the  clerk's 


vs.  United  States  of  America.  17 

office  of  this  court  and  that  it  become  a  part  of  the 
record  for  the  purposes  of  the  appeal,  taken  by  said 
defendants  on  January  8th,  1916,  from  said  judgment 
and  decree  of  this  Court  entered  December  9,  1915, 
as  aforesaid.  This  statement  is  not  intended  to  be 
and  is  not  a  statement  of  the  case  or  agreed  statement 
under  federal  equity  rule  seventy-seven  but  is  sub- 
mitted as  a  statement  analogous  to  the  statement  of 
the  evidence  provided  for  in  federal  equity  rule 
seventy-five. 

WM.  F.  HERRIN, 
P.  F.  DUNNE  and 
WM.  D.  FENTON, 
Attorneys  for  Appellants,   Oregon  and   California 
Railroad  Company,  Southern  Pacific  Company, 
and  Stephen  T.  Gage,  individually  and  as  trus- 
tee. 

MILLER,  KING,  LANE  &  TRAFFORD, 
DOLPH,  MALLORY,  SIMON  &  GEARIN, 
Attorneys  for  Appellant,  Union  Trust  Company  of 
New  York,  individually  and  as  trustee. 

District  of  Oregon, 
County  of  Multnomah, — ss. 

Due  service  of  the  within  statement  of  the  case  is 
admitted  this  1st  day  of  February,  1916. 

CLARENCE  L.  REAMES, 
Of  Solicitors  for  Complainant. 
Filed  February  1,  1916.     G.  H.  Marsh,  Clerk." 

And  afterwards,  to  wit,  on  Tuesday,  the  1st  day  of 
February,  1916,  the  same  being  the  80th  judicial  day 
of  the  regular  November,  1915,  term  of  said  Court ; 


18         Oregon  &  California  R.  R.  Co.  et  al. 

present,  the  Honorable  CHARLES  B.  WOLVER- 
TON,  United  States  District  Judge  presiding,  the 
following  proceedings  were  had  in  said  cause,  to  wit : 

ORDER  APPROVING  STATEMENT  OE  THE 

CASE. 

This  cause  came  on  to  be  heard  this  day  upon  the 
application  of  the  appellants,  Oregon  and  California 
Railroad  Company,  Southern  Pacific  Company,  Ste- 
phen T.  Gage,  individually  and  as  trustee,  and  Union 
Trust  Company,  individually  and  as  trustee,  defend- 
ants, for  an  order  approving  the  statement  of  the  case 
prepared  and  presented  by  the  appellants,  and  now 
tendered  to  be  filed  herein,  the  appellants  appearing 
by  their  attorneys  Wm.  D.  Fenton  and  John  M. 
Gearin,  and  the  complainant  appearing  by  Clarence 
L.  Reames,  United  States  District  Attorney  for  the 
District  of  Oregon,  representing  himself  and  Thomas 
W.  Gregory,  Attorney-General  of  the  United  States, 
and  C.  J.  Smyth,  special  assistant  to  the  Attorney- 
General  of  the  United  States,  attorneys  for  said  com- 
plainant; and  it  appearing  to  the  Court  that  said 
statement  is  correct  and  that  there  is  no  objection  to 
the  approval  thereof  by  this  Court, 

It  is  ordered  that  said  Statement  of  the  Case  now 
tendered  to  be  filed  is  hereby  approved  and  the  same 
is  now  directed  to  be  filed  in  the  clerk's  office  of  this 
court  as  of  this  date  and  to  become  a  part  of  the 
record,  for  the  purposes  of  the  appeal  heretofore 
taken  by  said  defendants  from  the  judgment  and 
decree  of  this  Court  entered  December  9,  1915. 


vs.  United  States  of  America.  19 

Dated :  February  1st,  1916. 

CHAS.  E.  WOLVERTON, 
Judge  of  said  District  Court. 
District  of  Oregon, 
County  of  Multnomah, — ss. 

Due  service  of  the  within  order  approving  state- 
ment of  the  case  is  admitted  this  1st  day  of  February, 
1916. 

CLARENCE  L.  REAMES, 
Of  Solicitors  for  Complainant. 
Filed  February  1,  1916.     G.  H.  Marsh,  Clerk. 

From  the  decree  of  the  District  Court,  of  Decem- 
ber 9th,  1915,  set  out  in  the  above  statement  the  appel- 
lants, Oregon  and  California  Railroad  Company, 
Southern  Pacific  Company,  Stephen  T.  Gage,  in- 
dividually and  as  trustee,  and  Union  Trust  Company 
of  New  York,  individually  and  as  trustee,  duly  took 
and  perfected  their  appeals  to  this  court  and  accom- 
panied the  same  with  their  assignments  of  error,  duly 
filed  on  January  8th,  1916,  as  follows : 

DEFENDANT    OREGON    AND    CALIFORNIA 

RAILROAD  COMPANY'S  ASSIGNMENT 

OF  ERRORS. 

The  defendant,  Oregon  and  California  Railroad 
Company,  complains  of  errors  in  the  proceedings  in 
this  case  in  the  District  Court  of  the  United  States 
for  the  District  of  Oregon,  in  the  above  cause, 
No.  3340  in  Equity,  and  in  the  decision,  judgment  and 
decree  rendered,  made  and  entered  therein  on  the 
9th  day  of  December,  1915,  under  and  in  alleged  pur- 
suance of  the  mandate  of  the  Supreme  Court  of  the 


20         Oregon  &  California  R.  B.  Co.  et  al. 

United  States  theretofore  filed  in  said  cause  on 
December  8th,  1915,  and  assigns  the  following  as  the 
errors  complained  of: 

1.  The  Court  erred  in  making  and  entering  the 
said  decree  of  December  9th,  1915. 

2.  The  Court  erred  in  not  pursuing  the  mandate 
of  the  Supreme  Court  of  the  United  States  thereto- 
fore filed  in  said  cause  on  December  8th,  1915. 

3.  The  said  decree  of  December  9th,  1915,  is  not 
in  pursuance  of  the  said  mandate,  and  the  Court  ac- 
cordingly erred  in  making  and  entering  such  decree. 

4.  The  Court  erred  in  making  and  entering  the 
said  decree  of  December  9th,  1915,  and  each  and  every 
paragraph  thereof. 

5.  The  Court  erred  in  adjudging  and  decreeing, 
as  in  paragraph  2  of  its  decree  set  forth,  "that  the 
defendants  and  their  respective  officers  and  agents 
be,  and  each  is  hereby,  enjoined  from  selling  the 
lands  or  any  part  thereof  granted  either  by  the  Act 
of  Congress  approved  July  25,  1866,  as  amended  by 
the  Act  of  Congress  of  April  10,  1869,  or  by  the  Act 
of  Congress  approved  May  4,  1870,  whether  the  said 
lands  be  situated  within  the  place  or  indemnity 
limits  of  the  grants  thereby  made,  to  any  person  not 
an  actual  settler  on  the  land  sold  to  him,  or  in  quan- 
tities greater  than  one-quarter  section  to  one  pur- 
chaser, or  for  a  price  exceeding  $2.50  per  acre ;  and 
from  selling  any  of  the  timber  on  said  lands,  or  any 
mineral  or  other  deposits  therein,  except  as  a  part 
of  and  in  conjunction  with  the  land  on  which  the 
timber  stands  or  in  which  the  mineral  or  other  de- 
posits are  found ;  and  from  cutting  or  removing  or 


vs.  United  States  of  America.  21 

authorizing  the  cutting  or  removal  of  any  of  the  tim- 
ber thereon;  or  from  removing  or  authorizing  the 
removal  of  mineral  or  other  deposits  therein,  except 
in  connection  with  the  sale  of  the  land  bearing  the 
timber  or  containing  the  mineral  or  other  deposits." 

6.  The  Court  erred  in  adding  to  the  term  "actual 
settler,"  in  said  paragraph  2,  the  qualifying  phrase 
"on  land  sold  to  him." 

7.  The  Court  erred  in  adjudging  and  decreeing 
that  the  defendants  and  their  respective  officers  and 
agents  be  and  are  by  said  decree  enjoined  from  sell- 
ing any  of  the  timber  on  said  lands,  except  as  a  part 
of  and  in  conjunction  with  the  land  on  which  the 
timber  stands;  also  from  cutting  or  removing,  or 
authorizing  the  cutting  or  removal  of  any  timber 
thereon,  except  in  connection  with  the  sale  of  the 
land  bearing  the  timber ;  also  from  selling  any  min- 
eral or  other  deposits  in  said  lands,  except  as  a  part 
of  and  in  conjunction  with  the  land  in  which  the 
mineral  or  other  deposits  are  found;  also  from  re- 
moving or  authorizing  the  removal  of  mineral  or 
other  deposits  therein,  except  in  connection  with  the 
sale  of  the  land  containing  the  mineral  or  other 
deposits. 

8.  The  Court  erred  in  its  said  decree  in  incorpo- 
rating into  and  making  part  of  the  general  injunc- 
tion therein  injunctive  matter  touching  the  sale  of 
the  timber  on  said  lands,  except  as  a  part  of  and  in 
conjunction  with  the  land  on  which  the  timber 
stands;  and  touching  the  cutting  or  removal,  or  the 
authorizing  of  the  cutting  or  removal  of  any  of  the 
timber  thereon,  except  in  connection  with  the  sale  of 


22         Oregon  &  California  R.  R.  Co.  et  al. 

the  land  bearing  such  timber ;  likewise  touching  the 
sale  of  any  mineral  or  other  deposits  in  said  lands, 
except  as  a  part  of  and  in  conjunction  with  the  land 
in  which  the  mineral  or  other  deposits  are  found; 
and  also  touching  the  removing  or  the  authorizing 
of  the  removal  of  mineral  or  other  deposits  in  said 
land,  except  in  connection  with  the  sale  of  the  land 
containing  such  mineral  or  other  deposits. 

9.  The  Court  erred  in  not  holding  and  decreeing 
that  there  was  a  complete  and  absolute  grant  in  this 
case  to  the  railroad  company,  with  power  to  sell, 
limited  only  as  prescribed  by  the  Granting  Act  and 
Acts. 

10.  The  Court  erred  in  not  holding  and  decreeing 
that  the  language  of  the  grants  herein  and  of  the 
limitations  upon  them  is  general,  and  that  it  was  not 
competent  to  the  said  Court  to  attach  exceptions 
thereto  in  its  decree. 

11.  The  Court  erred  in  not  holding  and  decreeing 
that  the  terms  of  the  settlers'  proviso  or  clause  in 
the  Granting  Act  and  Acts  are  prohibitive  and  not 
compulsory;  and  in  not  holding  and  decreeing  that 
the  observance  of  such  terms  would  consist  in  re- 
fraining from  making  sales  to  other  than  actual 
settlers  in  quantities  exceeding  160  acres  to  any  one 
purchaser,  for  a  price  exceeding  $2.50  an  acre. 

12.  The  Court  erred  in  not  holding  that  the  com- 
pany, under  a  complete  and  absolute  grant  to  it,  with 
power  to  sell,  limited  only  as  prescribed,  might 
choose  the  actual  settler,  might  sell  for  any  price  not 
exceeding  $2.50'  an  acre,  and  might  sell  in  quantities 


vs.  United  States  of  America.  23 

of  40,  60,  or  100  acres,  or  any  amount  not  exceeding 
160  acres. 

13.  The  Court  erred  in  not  holding  and  decreeing 
that  there  was  a  complete  and  absolute  grant  to  the 
railroad  company,  with  power  to  sell,  limited  only 
as  prescribed  in  the  Granting  Act  and  Acts;  and 
erred  in  not  holding  and  decreeing  that  there  was  no 
obligation  imposed  upon  the  railroad  company  to 
sell. 

14.  The  Court  erred  in  not  holding  and  decree- 
ing that  the  Granting  Act  and  Acts  did  not  impose 
an  affirmative  obligation  on  the  railroad  company  to 
sell  the  lands,  and  in  not  holding  and  decreeing  that 
the  so-called  settlers'  proviso  or  clause  in  the  Grant- 
ing Act  and  Acts  had  application  only  as  and  when 
the  railroad  company  made  sales  of  the  land. 

15.  The  Court  erred  in  not  holding  and  decreeing 
that  the  railroad  company,  so  long  as  the  granted 
lands  were  not  sold  by  it  but  remained  unalienated, 
had  a  complete  and  absolute  title  thereto,  and  under 
such  circumstances,  and  as  the  owner  of  such  a  title, 
had  the  right  to  sell,  cut,  remove,  or  authorize  the 
cutting  or  removal  of  the  timber  thereon;  and  the 
Court  erred  similarly  in  not  so  holding  and  decree- 
ing with  reference  to  any  mineral  or  other  deposits 
in  or  products  out  of  said  lands — subject  to  such 
qualifications  as  may  arise  from  the  limited  injunc- 
tion referable  to  the  period  of  six  months,  as  ex- 
pressed in  the  opinion  of  the  Supreme  Court. 

16.  The  Court  erred  in  not  holding  and  decreeing 
that  the  language  of  the  so-called  settlers'  clause  or 
proviso  in  the  Granting  Act  and  Acts  is  not  direc- 


24         Oregon  &  California  R.  R.  Co.  et  ah 
tive,  but  restrictive  only,  and  that  with  this  excep- 
tion, so  far  as  the  said  timber  or  mineral  deposits  or 
other  products  are  concerned,  or  any  or  either  of 
them,  the  grant  of  the  said  lands  was  unqualified. 

17.  The  Court  erred  in  not  holding  and  decreeing 
that  under  the  said  Granting  Act  and  Acts  the  rail- 
road company  had  a  discretion  of  sale  and  the  choice 
of  time  and  settlers ;  and  further  erred  in  not  hold- 
ing and  decreeing  that,  pending  the  exercise  of  such 
discretion  by  a  sale  in  accordance  with  the  require- 
ments of  the  Granting  Act  and  Acts,  the  said  rail- 
road company  had  a  complete  and  absolute  grant 
of  the  lands;  and  was  entitled,  as  of  right,  to  the 
timber  thereon  and  to  the  mineral  or  other  deposits 
therein,  and  to  the  products  of  the  soil  thereof;  and 
was  entitled,  as  of  right,  to  sell,  cut,  and  remove  such 
timber,  or  to  authorize  the  cutting  or  removal  of  the 
same,  and  to  remove,  sell  or  otherwise  enjoy  mineral 
or  other  deposits  therein,  or  any  products  of  the  soil 
thereof — subject  to  any  qualifications  arising  out  of 
the  limited  injunction  referable  to  the  six  months' 
period  above  mentioned. 

18.  The  Court  erred  in  not  holding  and  decree- 
ing that  the  railroad  company,  so  long  as  it  occupied 
the  status  of  an  owner  of  unalienated  lands  within 
the  limits  of  the  grant  and  grants,  had  all  the  rights 
therein  of  a  grantee  in  fee  simple,  including  the 
rights  of  such  grantee  to  the  timber  thereon  or  to 
the  mineral  or  other  deposits  therein,  or  to  the  pro- 
ducts of  the  soil  thereof — subject  to  any  qualifica- 
tion as  aforesaid,  arising  out  of  said  limited  in- 
junction. 


vs.  United  States  of  America.  25 

19.  The  Court  erred  in  not  holding  and  decreeing 
that  the  provisions  of  the  so-called  settlers'  proviso 
and  clause  in  the  Granting  Act  and  Acts  were  not 
directive,  but  restrictive  only ;  and  erred  in  not  hold- 
ing and  decreeing  that,  subject  to  the  restriction,  the 
railroad  company  took  the  grant  and  grants  with 
the  right  to  cut  timber  thereon,  or  open  and  work 
mines  therein,  or  cultivate  the  soil  thereof,  and 
own,  sell,  use  and  enjoy  such  timber,  or  the  products 
of  such  mines,  or  the  cultivation  of  such  soil — sub- 
ject to  any  qualification  as  aforesaid  arising  out  of 
said  limited  injunction. 

20.  The  Court  erred  in  not  holding  and  decree- 
ing that  timber  cut  upon  the  granted  lands,  while 
the  same  remained  unalienated  in  the  railroad  com- 
pany, belonged  to  said  railroad  company;  and  like- 
wise as  to  any  minerals  extracted  therefrom,  or  any 
products  of  the  soil  cultivated  thereon — subject  to 
any  qualification  arising  out  of  said  limited  injunc- 
tion, referable  to  the  aforesaid  period  of  six  months. 

21.  The  Court  erred  in  not  holding  and  decree- 
ing that  the  railroad  company  took  the  lands  in  ques- 
tion in  fee  and  was  accordingly  entitled  to  make  any 
use  thereof  not  in  violation  of  the  restrictive  coven- 
ants found  in  the  so-called  settlers'  proviso  and 
clause  in  the  Granting  Act  and  Acts,  and  not  in  vio- 
lation of  the  limited  injunction  as  aforesaid. 

22.  The  Court  erred  in  making  and  entering  a 
decree  herein  in  modification  and  enlargement  of  the 
terms  of  the  mandate  from  the  Supreme  Court  of 
the  United  States. 

23.  The  Court  erred  in  not  making  and  entering 


26         Oregon  &  California  R.  R.  Co.  et  al. 

a  decree  herein  responsive  to  the  mandate  of  the 
Supreme  Court  of  the  United  States,  without  modi- 
fication or  enlargement,  and  in  the  terms  of  the 
opinion  to  which  the  said  mandate  referred,  and 
which  was  expressive  of  the  mandate  itself. 

24.  The  Court  erred  in  adjudging  and  decreeing 
that  the  complainant  have  and  recover  from  the  de- 
fendants, Oregon  and  California  Railroad  Company, 
Southern  Pacific  Company,  Stephen  T.  Gage,  indi- 
vidually and  as  trustee,  and  Union  Trust  Company, 
individually  and  as  trustee,  and  each  of  them,  or 
from  any  or  either  of  them,  any  costs  or  disburse- 
ments herein;  and  in  adjudging  and  decreeing  that 
execution  issue  against  the  said  defendants,  or  any 
or  either  of  them,  for  any  costs  or  disbursements 
herein. 

25.  The  Court  erred  in  not  holding  and  decreeing 
that  no  costs  or  disbursements  should  be  recovered 
herein  from  the  Oregon  and  California  Railroad 
Company,  or  the  Southern  Pacific  Company,  or 
Stephen  T.  Gage,  individually  and  as  trustee,  or 
Union  Trust  Company,  individually  and  as  trustee, 
or  any  or  either  of  them. 

26.  The  Court  erred  in  not  holding  and  decreeing 
that  the  main  contention  of  the  Government,  and 
the  one  insisted  upon  in  its  bill  of  complaint  and  at 
the  trial  of  the  cause,  was  the  contention  that  the 
so-called  settlers'  clause  and  proviso  in  the  Granting 
Act  and  Acts  was  a  condition  subsequent;  and  in  not 
holding  and  decreeing  that  the  said  defendants  last 
named,  and  each  and  every  of  them,  were  justified 
and  acted  of  right  in  resisting  such  contention,  both 


vs.  United  States  of  America.  27 

below  and  on  appeal;  and  in  not  holding  and  decree- 
in  u;  that  inasmuch  as  the  said  defendants  had  pre- 
vailed in  resisting  such  contention,  it  was  not  equi- 
table to  tax  them,  or  either  of  them,  with  costs  and 
disbursements  herein  in  favor  of  the  complainant. 

27.  The  Court  erred  in  not  holding  and  decreeing 
that  it  was  inequitable  to  impose  costs  herein  in 
favor  of  complainant  on  the  said  defendants ;  and  in 
not  holding  and  decreeing  that  the  case  here  should 
be  disposed  of  without  adjudging  costs  in  favor 
either  of  said  defendants  or  of  the  complainant,  leav- 
ing each  to  bear  the  costs  of  his  or  its  own  side  of  the 
litigation. 

28.  The  Court  erred  in  not  making  and  entering 
as  and  for  its  decree  in  this  cause,  and  in  place  and 
stead  of  the  decree  made  and  entered  by  it  as  afore- 
said, the  decree  in  the  form  tendered  to  it  by  the  said 
last-named  defendants  and  each  and  every  of  them 
— that  is  to  say,  in  not  making  and  entering  as  its 
decree  in  said  cause,  the  following  decree : 

"In  pursuance  of  the  mandate  of  the  Supreme 
Court  of  the  United  States,  filed  in  this  court  on  the 
8th  day  of  December,  1915,  in  the  above-entitled 
cause,  counsel  for  the  respective  parties  being  pres- 
ent, it  is  by  the  Court  ordered,  adjudged  and  decreed 
as  follows: 

1.  That  the  decree  heretofore  entered  in  said 
cause,  so  far  as  it  affects  the  defendants,  Oregon  and 
California  Railroad  Company,  Southern  Pacific 
Company,  Stephen  T.  Gage,  individually  and  as 
trustee,  Union  Trust  Company,  individually  and  as 
trustee,  hereinafter  called  the  'defendants'  be,  and 


28         Oregon  &  California  R.  R.  Co.  et  al. 

the  same  is  hereby,  set  aside  and  held  for  naught, 
but  is  adhered  to  in  all  respects  as  to  the  defendants 
and  cross-complainants,  hereinafter  called  the 
'cross-complainants'  and  'interveners.' 

2.  That  the  said  defendants  and  their  respective 
officers  and  agents  be,  and  each  is  hereby,  enjoined 
from  selling  the  lands,  or  any  part  thereof,  granted 
either  by  the  Act  of  Congress  approved  July  25, 
1866,  as  amended  by  the  Act  of  Congress  of  April  10, 

1869,  or  by  the  Act  of  Congress  approved  May  4, 

1870,  whether  the  said  lands  be  situated  within  the 
place  or  indemnity  limits  of  the  grants  thereby  made 
to  any  person  not  an  actual  settler,  or  in  quantities 
greater  than  one-quarter  section  to  one  purchaser, 
or  for  a  price  exceeding  two  dollars  and  a  half 
($2.50)  per  acre. 

3.  That  the  said  defendants  and  their  respective 
officers  and  agents  be,  and  each  is  hereby,  enjoined 
from  any  disposition  of  the  said  lands  or  any  part 
thereof,  or  of  the  timber  thereon,  and  from  cutting 
or  authorizing  the  cutting  or  removal  of  any  of  the 
timber  thereon,  until  Congress  shall  have  a  reason- 
able opportunity  to  provide  by  legislation  for  the 
disposition  of  said  lands  in  accordance  with  such 
policy  as  it  may  deem  fitting  under  the  circum- 
stances, and  at  the  same  time  secure  to  the  defend- 
ants all  the  value  the  granting  acts  conferred  upon 
the  grantees;  but  if  Congress  does  not  make  such 
provision,  the  defendants  may  apply  to  this  Court, 
within  a  reasonable  time,  not  less  than  six  (6) 
months  from  the  entry  of  the  decree  herein,  for  a 
modification  of  so  much  of  the  injunction  herein  or- 


vs.  United  States  of  America.  29 

derod  as  enjoins  any  disposition  of  the  lands  and 
timber  until  Congress  shall  act." 

WHEREFORE,  this  defendant,  Oregon  and  Cali- 
fornia Railroad  Company,  prays  that  the  aforesaid 
judgment  and  decree  which  was  made,  rendered  and 
entered  herein  by  the  above-entitled  Court  in  said 
cause  No.  3340  in  Equity,  on  the  9th  day  of  Decem- 
ber, 1915,  and  that  each  of  said  paragraphs  of  said 
judgment  and  decree  be  reversed,  excepting  para- 
graph 1  thereof,  wherein  it  is  provided: 

"That  the  decree  heretofore  entered  in  said 
cause,  so  far  as  it  affects  the  defendants,  Ore- 
gon &  California  Railroad  Company,  South- 
ern Pacific  Company,  Stephen  T.  Gage,  indi- 
vidually and  as  trustee,  Union  Trust  Company, 
individually  and  as  trustee,  hereinafter  called 
the  'defendants,'  be,  and  the  same  is  hereby  set 
aside  and  held  for  naught,  but  is  adhered  to 
in  all  respects  as  to  the  defendants  and  cross- 
complainants,  hereinafter  called  the  'cross- 
complainants,'  and  the  interveners," 

and  particularly  that  paragraph  2  and  that  para- 
graph 7  of  said  judgment  and  decree  be  reversed, 
and  for  such  other  relief  to  this  defendant,  'said 
Southern  Pacific  Company,  said  Stephen  T.  Gage, 
individually  and  as  Trustee,  and  said  Union  Trust 
Company,  individually  and  as  Trustee,  as  may  be 
proper. 

WM.  F.  HERRIN, 
P.  F.  DUNNE, 
WM.  D.  FENTON, 
Solicitors  and  Attorneys  for  said  Oregon  and  Cali- 
fornia Railroad  Company. 


30         Oregon  &  California  R.  R.  Co.  et  al. 

Service  of  the  foregoing  Assignments  of  Errors 
admitted  this  8th  day  of  January,  1916. 

JOHN  W.  DAVIS, 
Solicitor  General  of  the  United  States. 

C.  J.  SMYTH, 
Special  Assistant  to  the  Attorney  General. 
Solicitors  and  Attorneys  for  Appellee. 
CLARENCE  L.  REAMES, 
United  States  Attorney. 
Filed  January  8,  1916.     G.  H.  Marsh,  Clerk. 
And  afterwards,  to  wit,  on  the  8th  day  of  January, 
1916,  there  was  duly  filed  in  said  court  and  cause,  an 
Assignment  of  Errors,  by  the  defendant,  the  South- 
ern Pacific  Company,  in  words  and  figures  as  fol- 
lows, to  wit: 

DEFENDANT  SOUTHERN  PACIFIC  COM- 
PANY'S ASSIGNMENT  OF  ERRORS. 
The  defendant,  Southern  Pacific  Company,  com- 
plains of  errors  in  the  proceedings  in  this  case  in  the 
District  Court  of  the  United  States  for  the  District 
of  Oregon,  in  the  above  cause,  No.  3340  in  Equity, 
and  in  the  decision,  judgment  and  decree  rendered, 
made  and  entered  therein  on  the  9th  day  of  Decem- 
ber, 1915,  under  and  in  alleged  pursuance  of  the  man- 
date of  the  Supreme  Court  of  the  United  States 
theretofore  filed  in  said  cause  on  December  8th, 
1915,  and  assigns  the  following  as  the  errors  com- 
plained of: 

1.  The  Court  erred  in  making  and  entering  the 
said  decree  of  December  9th,  1915. 

2.  The  Court  erred  in  not  pursuing  the  mandate 
of  the  Supreme  Court  of  the  United  States  thereto- 


vs.  United  States  of  America.  31 

fore  filed  in  said  cause  on  December  8th,  1915. 

3.  The  said  decree  of  December  9th,  1915,  is  not 
in  pursuance  of  the  said  mandate,  and  the  Court  ac- 
cordingly erred  in  making  and  entering  such  decree. 

4.  The  Court  erred  in  making  and  entering  the 
said  decree  of  December  9th,  1915,  and  each  and 
every  paragraph  thereof. 

5.  The  Court  erred  in  adjudging  and  decreeing, 
as  in  paragraph  2  of  its  decree  set  forth,  "that  the 
defendants  and  their  respective  officers  and  agents 
be,  and  each  is  hereby,  enjoined  from  selling  the 
lands  or  any  part  thereof  granted  either  by  the  Act 
of  Congress  approved  July  25,  1866,  as  amended  by 
the  Act  of  Congress  of  April  10,  1869,  or  by  the  Act 
of  Congress  approved  May  4,  1870,  whether  the  said 
lands  be  situated  within  the  place  or  indemnity  lim- 
its of  the  grants  thereby  made,  to  any  person  not  an 
actual  settler  on  the  land  sold  to  him,  or  in  quanti- 
ties greater  than  one-quarter  section  to  one  pur- 
chaser, or  for  a  price  exceeding  $2.50  per  acre;  and 
from  selling  any  of  the  timber  on  said  lands,  or  any 
mineral  or  other  deposits  therein,  except  as  a  part 
of  and  in  conjunction  with  the  land  on  which  the 
timber  stands  or  in  which  the  mineral  or  other  de- 
posits are  found;  and  from  cutting  or  removing  or 
authorizing  the  cutting  or  removing  of  any  of  the 
timber  thereon ;  or  from  removing  or  authorizing  the 
removal  of  mineral  or  other  deposits  therein,  except 
in  connection  with  the  sale  of  the  land  bearing  the 
timber  or  containing  the  mineral  or  other  deposits. " 

6.  The  Court  erred  in  adding  to  the  term  "  actual 
settler,"  in  said  paragraph  2,  the  qualifying  phrase 


32         Oregon  &  California  R.  B.  Co.  et  al. 

1  'on  the  land  sold  to  him." 

.7.  The  Court  erred  in  adjudging  and  decreeing 
that  the  defendants  and  their  respective  officers  and 
agents  be  and  are  by  said  decree  enjoined  from  sell- 
ing  any  of  the  timber  on  said  lands,  except  as  a  part 
of  and  in  conjunction  with  the  land  on  which  the 
timber  stands;  also  from  cutting  or  removing,  or 
authorizing  the  cutting  or  removal  of  any  timber 
thereon,  except  in  connection  with  the  sale  of  the 
land  bearing  the  timber;  also  from  selling  any  min- 
eral or  other  deposits  in  said  lands,  except  as  a  part 
of  and  in  conjunction  with  the  land  in  which  the 
mineral  or  other  deposits  are  found;  also  from  re- 
moving or  authorizing  the  removal  of  mineral  or 
other  deposits  therein,  except  in  connection  with  the 
sale  of  the  land  containing  the  mineral  or  other 
deposits. 

8.  The  Court  erred  in  its  said  decree  in  incor- 
porating into  and  making  part  of  the  general  injunc- 
tion therein  injunctive  matter  touching  the  sale  of 
the  timber  on  said  lands,  except  as  a  part  of  and  in 
conjunction  with  the  land  on  which  the  timber  stands ; 
and  touching  the  cutting  or  removal,  or  the  author- 
izing of  the  cutting  or  removal  of  any  of  the  timber 
thereon,  except  in  connection  with  the  sale  of  the 
land  bearing  such  timber;  likewise  touching  the  sale 
of  any  mineral  or  other  deposits  in  said  lands,  except 
as  a  part  of  and  in  conjunction  with  the  land  in  which 
the  mineral  or  other  deposits  are  found;  and  also 
touching  the  removing  or  the  authorizing  of  the  re- 
moval of  mineral  or  other  deposits  in  said  land,  ex- 
cept in  connection  with  the  sale  of  the  land  containing 


vs.  United  States  of  America.  33 

such  mineral  or  other  deposits. 

9.  The  Court  erred  in  not  holding  and  decreeing 
that  there  was  a  complete  and  absolute  grant  in  this 
case  to  the  railroad  company,  with  power  to  sell, 
limited  only  a  prescribed  by  the  Granting  Act  and 
Acts. 

10.  The  Court  erred  in  not  holding  and  decreeing 
that  the  language  of  the  grants  herein  and  of  the 
limitations  upon  them  is  general,  and  that  it  was  not 
competent  to  the  said  Court  to  attach  exceptions 
thereto  in  its  decree. 

11.  The  Court  erred  in  not  holding  and  decreeing 
that  the  terms  of  the  settlers '  proviso  or  clause  in  the 
Granting  Act  and  Acts  are  prohibitive  and  not  com- 
pulsory; and  in  not  holding  and  decreeing  that  the 
observance  of  such  terms  would  consist  in  refraining 
from  making  sales  to  other  than  actual  settlers  in 
quantities  exceeding  160  acres  to  any  one  purchaser,, 
for  a  price  exceeding  $2.50  an  acre. 

12.  The  Court  erred  in  not  holding  that  the  com- 
pany, under  a  complete  and  absolute  grant  to  it,  with 
power  to  sell,  limited  only  as  prescribed,  might  choose 
the  actual  settler,  might  sell  for  any  price  not  exceed- 
ing $2.50  an  acre,  and  might  sell  in  quantities  of  40, 
60,  or  100  acres,  or  any  amount  not  exceeding  160 
acres. 

13.  The  Court  erred  in  not  holding  and  decreeing 
that  there  was  a  complete  and  absolute  grant  to  the 
railroad  company,  with  power  to  sell,  limited  only  as 
prescribed  in  the  Granting  Act  and  Acts ;  and  erred 
in  not  holding  and  decreeing  that  there  was  no  obliga- 
tion imposed  upon  the  railroad  company  to  sell. 


34  Oregon  &  California  R.  R.  Co.  et  al. 

14.  The  Court  erred  in  not  holding  and  decreeing 
that  the  Granting  Act  and  Acts  did  not  impose  an 
affirmative  obligation  on  the  railroad  company  to  sell 
the  lands,  and  in  not  holding  and  decreeing  that  the 
so-called  settlers'  proviso  or  clause  in  the  Granting 
Act  and  Acts  had  application  only  as  when  the  rail- 
road company  made  sales  of  the  land. 

15.  The  Court  erred  in  not  holding  and  decreeing 
that  the  railroad  company,  so  long  as  the  granted 
lands  were  not  sold  by  it  but  remained  unalienated, 
had  a  complete  and  absolute  title  thereto,  and  under 
such  circumstances,  and  as  the  owner  of  such  a  title, 
had  the  right  to  sell,  cut,  remove,  or  authorize  the 
cutting  or  removal  of  the  timber  thereon;  and  the 
Court  erred  similarly  in  not  so  holding  and  decreeing 
with  reference  to  any  mineral  or  other  deposits  in  or 
products  out  of  said  land — subject  to  such  qualifica- 
tion as  may  arise  from  the  limited  injunction  refer- 
able to  the  period  of  six  months,  as  expressed  in  the 
opinion  of  the  Supreme  Court. 

16.  The  Court  erred  in  not  holding  and  decreeing 
that  the  language  of  the  so-called  settler's  clause  or 
proviso  in  the  Granting  Act  and  Acts  is  not  directive, 
but  restrictive  only,  and  that  with  this  exception,  so 
far  as  the  said  timber  or  mineral  deposits  or  other 
products  are  concerned,  or  any  or  either  of  them,  the 
grant  of  the  said  lands  was  unqualified. 

17.  The  Court  erred  in  not  holding  and  decreeing 
that  under  the  said  Granting  Act  and  Acts  the  rail- 
road company  had  a  discretion  of  sale  and  the  choice 
of  time  and  settlers ;  and  further  erred  in  not  holding 
and  decreeing  that,  pending  the  exercise  of  such  dis- 


vs.  United  States  of  America.  35 

eretion  by  a  sale  in  accordance  with  the  requirements 
of  the  Granting  Act  and  Acts,  the  said  railroad  com- 
pany had  a  complete  and  absolute  grant  of  the  lands ; 
and  was  entitled,  as  of  right,  to  the  timber  thereon 
and  to  the  mineral  or  other  deposits  therein,  and  to 
the  products  of  the  soil  thereof ;  and  was  entitled,  as 
of  right,  to  sell,  cut,  and  remove  such  timber,  or  to 
authorize  the  cutting  or  removal  of  the  same,  and  to 
remove,  sell  or  otherwise  enjoy  mineral  or  other  de- 
posits therein,  or  any  products  of  the  soil  thereof — 
subject  to  any  qualification  arising  out  of  the  lim- 
ited injunction  referable  to  the  six  months'  period 
above  mentioned. 

18.  The  Court  erred  in  not  holding  and  decreeing 
that  the  railroad  company,  so  long  as  it  occupied  the 
status  of  an  owner  of  unalienated  lands  within  the 
limits  of  the  grant  and  grants,  had  all  the  rights 
therein  of  a  grantee  in  fee  simple,  including  the 
rights  of  such  grantee  to  the  timber  thereon  or  to 
the  mineral  or  other  deposits  therein,  or  to  the  pro- 
ducts of  the  soil  thereof — subject  to  any  qualification 
as  aforesaid,  arising  out  of  said  limited  injunction. 

19.  The  Court  erred  in  not  holding  and  decreeing 
that  the  provision  of  the  so-called  settlers'  proviso 
and  clause  in  the  Granting  Act  and  Acts  were  not 
directive,  but  restrictive  only ;  and  erred  in  not  hold- 
ing and  decreeing  that,  subject  to  the  restriction,  the 
railroad  company  took  the  grant  and  grants  with  the 
right  to  cut  timber  thereon,  or  open  and  work  mines 
therein,  or  cultivate  the  soil  thereof,  and  own,  sell, 
use  and  enjoy  such  timber,  or  the  products  of  such 
mines,  or  the  cultivation  of  such  soil— subject  to  any 


36         Oregon  &  California  R.  R.  Co.  et  al. 

qualification  as  aforesaid  arising  out  of  said  limited 
injunction. 

20.  The  Court  erred  in  not  holding  and  decreeing 
that  timber  cut  upon  the  granted  lands,  while  the 
the  same  remained  unalienated  in  the  railroad  com- 
pany, belonged  to  said  railroad  company;  and  like- 
wise as  to  any  minerals  extracted  therefrom,  or  any 
products  of  the  soil  cultivated  thereon — subject  to 
any  qualification  arising  out  of  said  limited  injunc- 
tion, referable  to  the  aforesaid  period  of  six  months. 

21.  The  Court  erred  in  not  holding  and  decreeing 
that  the  railroad  company  took  the  lands  in  question 
in  fee  and  was  accordingly  entitled  to  make  any  use 
thereof  not  in  violation  of  the  restrictive  covenants 
found  in  the  so-called  settlers'  proviso  and  clause  in 
the  Granting  Act  and  Acts,  and  not  in  violation  of  the 
limited  injunction  as  aforesaid. 

22.  The  Court  erred  in  making  and  entering  a  de- 
cree herein  in  modification  and  enlargement  of  the 
terms  of  the  mandate  from  the  Supreme  Court  of  the 
United  States. 

23.  The  Court  erred  in  not  making  and  entering  a 
decree  herein  responsive  to  the  mandate  of  the  Su- 
preme Court  of  the  United  States,  without  modifica- 
tion or  enlargement,  and  in  the  terms  of  the  opinion 
to  which  the  said  mandate  referred,  and  which  was 
expressive  of  the  mandate  itself. 

24.  The  Court  erred  in  adjudging  and  decreeing 
that  the  complainant  have  and  recover  from  the  de- 
fendants, Oregon  and  California  Railroad  Company, 
Southern  Pacific  Company,  Stephen  T.  Gage,  in- 
dividually and  as  trustee,  and  Union  Trust  Company, 


vs.  United  States  of  America.  37 

individually  and  as  trustee,  and  each  of  them,  or  from 
any  or  either  of  them,  any  costs  or  disbursements 
herein;  and  in  adjudging  and  decreeing  that  execu- 
tion issue  against  the  said  defendants,  or  any  or 
either  of  them,  for  any  costs  or  disbursements  herein. 

25.  The  Court  erred  in  not  holding  and  decreeing 
that  no  costs  or  disbursements  should  be  recovered 
herein  from  the  Oregon  and  California  Eailroad 
Company,  or  the  Southern  Pacific  Company,  or 
Stephen  T.  Gage,  individually  and  as  trustee,  or 
Union  Trust  Company,  individually  and  as  trustee, 
or  any  or  either  of  them. 

26.  The  Court  erred  in  not  holding  and  decreeing 
that  the  main  contention  of  the  Government,  and  the 
one  insisted  upon  in  its  bill  of  complaint  and  at  the 
trial  of  the  cause,  was  the  contention  that  the  so- 
called  settlers '  clause  and  proviso  in  the  Granting  Act 
and  Acts  was  a  condition  subsequent ;  and  in  not  hold- 
ing and  decreeing  that  the  said  defendants  last 
named,  and  each  and  every  of  them,  were  justified 
and  acted  of  right  in  resisting  such  contention,  both 
below  and  on  appeal ;  and  in  not  holding  and  decree- 
ing that  inasmuch  as  the  said  defendants  had  pre- 
vailed in  resisting  such  contention,  it  was  not  equi- 
table to  tax  them,  or  either  of  them,  with  costs  and 
disbursements  herein  in  favor  of  the  complainant. 

27.  The  Court  erred  in  not  holding  and  decreeing 
that  it  was  inequitable  to  impose  costs  herein  in  favor 
of  complainant  on  the  said  defendants;  and  in  not 
holding  and  decreeing  that  the  case  here  should  be 
disposed  of  without  adjudging  costs  in  favor  either 
of  said  defendants  or  of  the  complainant,  leaving  each 


38         Oregon  &  California  R.  R.  Co.  et  al. 

to  bear  the  costs  of  his  or  its  own  side  of  the  litiga- 
tion. 

28.  The  Court  erred  in  not  making  and  entering 
as  and  for  its  decree  in  this  cause,  and  in  place  and 
stead  of  the  decree  made  and  entered  by  it  as  afore- 
said, the  decree  in  the  form  tendered  to  it  by  the  said 
last-namd  defendants  and  each  and  every  of  them — 
that  is  to  say,  in  not  making  and  entering  as  its  de- 
cree in  said  cause,  the  following  decree : 

"In  pursuance  of  the  mandate  of  the  Supreme 
Court  of  the  United  States,  filed  in  this  Court  on 
the  8th  day  of  December,  1915,  in  the  above-entitled 
cause,  counsel  for  the  respective  parties  being  pres- 
ent, it  is  by  the  Court  ordered,  adjudged  and  decreed 
as  follows: 

1.  That  the  decree  heretofore  entered  in  said 
cause,  so  far  as  it  affects  the  defendants,  Oregon  and 
California  Railroad  Company,  Southern  Pacific 
Company,  Stephen  T.  Gage,  individually  and  as  trus- 
tee, Union  Trust  Company,  individually  and  as  trus- 
tee, hereinafter  called  the  'defendants'  be,  and  the 
same  is  hereby,  set  aside  and  held  for  naught,  but 
is  adhered  to  in  all  respects  as  to  the  defendants  and 
cross-complainants,  hereinafter  called  the  'cross- 
complainants'  and  'interveners.' 

2.  That  said  defendants  and  their  respective  offi- 
cers and  agents  be,  and  each  is  hereby,  enjoined  from 
selling  the  lands,  or  any  part  thereof,  granted  either 
by  the  Act  of  Congress  approved  July  25,  1866,  as 
amended  by  the  Act  of  Congress  of  April  10,  1869, 
or  by  the  Act  of  Congress  approved  May  4,  1870, 
whether  the  said  lands  be  situated  within  the  place 


vs.  United  States  of  America.  39 

or  indemnity  limits  of  the  grants  thereby  made  to 
any  person  not  an  actual  settler,  or  in  quantities 
greater  than  one-quarter  section  to  one  purchaser, 
or  for  a  price  exceeding  two  dollars  and  a  half 
($2.50)  per  acre. 

3.  That  the  said  defendants  and  their  respective 
officers  and  agents  be,  and  each  is  hereby,  enjoined 
from  any  disposition  of  the  said  lands  or  any  part 
thereof,  or  of  the  timber  thereon,  and  from  cutting 
or  authorizing  the  cutting  or  removal  of  any  of  the 
timber  thereon,  until  Congress  shall  have  a  reason- 
able opportunity  to  provide  by  legislation  for  the 
disposition  of  said  lands  in  accordance  with  such  pol- 
icy as  it  may  deem  fitting  under  the  circumstances, 
and  at  the  same  time  secure  to  the  defendants  all 
the  value  the  granting  acts  conferred  upon  the  gran- 
tees ;  but  if  Congress  does  not  make  such  provision, 
the  defendants  may  apply  to  this  Court,  within  a 
reasonable  time,  not  less  than  six  (6)  months  from 
the  entry  of  the  decree  herein,  for  a  modification  of 
so  much  of  the  injunction  herein  ordered  as  enjoins 
any  disposition  of  the  lands  and  timber  until  Con- 
gress shall  act." 

WHEREFORE,  this  defendant,  Southern  Pacific 
Company,  prays  that  the  aforesaid  judgment  and  de- 
cree which  was  made,  rendered  and  entered  herein 
by  the  above-entitled  Court  in  said  No.  3340  in 
Equity,  on  the  9th  day  of  December,  1915,  and  that 
each  of  said  paragraphs  of  said  judgment  and  decree 
be  reversed,  excepting  paragraph  1  thereof,  wherein 
it  is  provided : 


40         Oregon  &  California  R.  B.  Co.  et  ah 

"That  the  decree  heretofore  entered  in  said 
cause,  so  far  as  it  affects  the  defendants,  Ore- 
gon &  California  Railroad  Company,  Southern 
Pacific  Company,  Stephen  T.  Gage,  individu- 
ally and  as  trustee,  Union  Trust  Company, 
individually  and  as  trustee,  hereinafter  called 
'the  defendants,'  be,  and  the  same  is  hereby 
set  aside  and  held  for  naught,  but  is  adhered 
to  in  all  respects  as  to  the  defendants  and  cross 
complainants,  hereinafter  called  the  'cross- 
complainants,'  and  the  interveners," 

and  particularly  that  paragraph  2  and  that  para- 
graph 7  of  said  judgment  and  decree  be  reversed, 
and  for  such  other  relief  to  this  defendant,  said  Ore- 
gon and  California  Railroad  Company,  said  Stephen 
T.  Gage,  individually  and  as  trustee,  and  said  Union 
Trust  Company,  individually  and  as  Trustee,  as  may 

be  proper. 

WM.  F.  HERRIN, 

P.  F.  DUNNE, 

WM.  D.  FENTON, 

Solicitors  and  Attorneys  for  said  Southern  Pacific 

Company. 

Service  of  the  foregoing  Assignments  of  Errors 

admitted  this  8th  day  of  January,  1916. 

JOHN  W.  DAVIS, 

Solicitor  General  of  the  United  States. 

C.  J.  SMYTH, 

Special  Assistant  to  the  Attorney  General, 

Solicitors  and  Attorneys  for  Appellee. 

CLARENCE  L.  REAMES, 

United  States  Attorney. 

Filed  January  8,  1916.     G.  H.  Marsh,  Clerk. 


vs.  United  States  of  America.  41 

And  afterwards,  to  wit,  on  the  8th  day  of  January, 
1916,  there  was  duly  filed  in  said  court  and  cause,  an 
Assignment  of  Errors  by  Stephen  T.  Gage  (individu- 
ally and  as  trustee),  in  words  and  figures  as  follows, 
to  wit: 

DEFENDANT  STEPHEN  T.  GAGE'S  (Individ- 
ually   and    as    Trustee)    ASSIGNMENT    OF 
ERRORS. 
The  defendant,  Stephen  T.  Gage,  individually  and 
as  trustee,  complains  of  errors  in  the  proceedings  in 
this  case  in  the  District  Court  of  the  United  States 
for  the  District  of  Oregon,  in  the  above  cause,  No. 
3340  in  Equity,  and  in  the  decision,  judgment  and 
decree  rendered,  made  and  entered  therein  on  the 
9th  day  of  December,  1915,  under  and  in  alleged  pur- 
suance of  the  mandate  of  the  Supreme  Court  of  the 
United  States  theretofore  filed  in  said  cause  on  De- 
cember 8th,  1915,  and  assigns  the  following  as  the 
errors  complained  of: 

1.  The  Court  erred  in  making  and  entering  the 
said  decree  of  December  9th,  1915. 

2.  The  Court  erred  in  not  pursuing  the  mandate 
of  the  Supreme  Court  of  the  United  States  thereto- 
fore filed  in  said  cause  on  December  8th,  1915. 

3.  The  said  decree  of  December  9th,  1915,  is  not 
in  pursuance  of  the  said  mandate,  and  the  Court  ac- 
cordingly erred  in  making  and  entering  such  decree. 

4.  The  Court  erred  in  making  and  entering  the 
said  decree  of  December  9th,  1915,  and  each  and 
every  paragrah  thereof. 

5.  The  Court  erred  in  adjudging  and  decreeing, 


42         Oregon  &  California  R.  R.  Co.  et  al. 

as  in  paragraph  2  of  its  decree  set  forth,  "that  the 
defendants  and  their  respective  officers  and  agents 
be,  and  each  is  hereby  enjoined  from  selling  the  lands 
or  any  part  thereof  granted  either  by  the  Act  of  Con- 
gress approved  July  25,  1866,  as  amended  by  the  Act 
of  Congress  of  April  10,  1869,  or  by  the  Act  of  Con- 
gress approved  May  4,  1870,  whether  the  said  lands 
be  situated  within  the  place  or  indemnity  limits  of: 
the  grants  thereby  made,  to  any  person  not  an  actual 
settler  on  the  land  sold  to  him,  or  in  quantities  greater 
than  one-quarter  section  to  one  purchaser,  or  for  a 
price  exceeding  $2.50  per  acre ;  and  from  selling  any 
of  the  timber  on  said  lands,  or  any  mineral  or  other 
deposits  therein,  except  as  a  part  of  and  in  conjunc- 
tion with  the  land  on  which  the  timber  stands  or  in 
which  the  mineral  or  other  deposits  are  found;  and 
from  cutting  or  removing  or  authorizing  the  cutting 
or  removal  of  any  of  the  timber  thereon;  or  from 
removing  or  authorizing  the  removal  of  mineral  or 
other  deposits  therein,  except  in  connection  with  the 
sale  of  the  land  bearing  the  timber  or  containing  the 
mineral  or  other  deposits." 

6.  The  Court  erred  in  adding  to  the  term  ' '  actual 
settler,"  in  said  paragraph  2,  the  qualifying  phrase 
"on  the  land  sold  to  him." 

7.  The  Court  erred  in  adjudging  and  decreeing 
that  the  defendants  and  their  respective  officers  and 
agents  be  and  are  by  said  decree  enjoined  from  sell- 
ing any  of  the  timber  on  said  lands,  except  as  a  part 
of  and  in  conjunction  with  the  land  on  which  the 
timber  stands ;  also  from  cutting  or  removing,  or  au- 
thorizing  the    cutting   or   removal   of   any   timber 


vs.  United  States  of  America.  4B 

thereon,  except  in  connection  with  the  sale  of  the 
land  bearing  the  timber;  also  from  selling  any  min- 
eral or  other  deposits  in  said  lands,  except  as  a  part 
of  and  in  conjunction  with  the  land  in  which  the  min- 
eral or  other  deposits  are  found;  also  from  remov- 
ing or  authorizing  the  removal  of  mineral  or  other 
deposits  therein,  except  in  connection  with  the  sale 
of  the  land  containing  the  mineral  or  other  deposits. 
8.     The  Court  erred  in  its  said  decree  in  incorpo- 
rating into  and  making  part  of  the  general  injunc- 
tion therein  injunctive  matter  touching  the  sale  of 
the  timber  on  said  lands,  except  as  a  part  of  and  in 
conjunction   with   the   land   on   which   the   timber 
stands ;  and  touching  the  cutting  or  removal,  or  the 
authorizing  of  the  cutting  or  removal  of  any  of  the 
timber  thereon,  except  in  connection  with  the  sale  of 
the  land  bearing  such  timber;  likewise  touching  the 
sale  of  any  mineral  or  other  deposits  in  said  lands, 
except  as  a  part  of  and  in  conjunction  with  the  land 
in  which  the  mineral  or  other  deposits  are  found; 
and  also  touching  the  removing  or  the  authorizing  of 
the  removal  of  mineral  or  other  deposits  in  said  land, 
except  in  connection  with  the  sale  of  the  land  con- 
taining such  mineral  or  other  deposits. 

9.  The  Court  erred  in  not  holding  and  decreeing 
that  there  was  a  complete  and  absolute  grant  in  this 
case  to  the  railroad  company,  with  power  to  sell, 
limited  only  as  prescribed  by  the  Granting  Act  and 
Acts. 

10.  The  Court  erred  in  not  holding  and  decree- 
ing that  the  language  of  the  grants  herein  and  of  the 
limitations  upon  them  is  general,  and  that  it  was  not 


44         Oregon  &  California  R.  R.  Co.  et  al. 

Competent  to  the  said  Court  to  attach  exceptions 
thereto  in  its  decree. 

11.  The  Court  erred  in  not  holding  and  decree- 
ing that  the  terms  of  the  settlers'  proviso  or  clause 
in  the  Granting  Act  and  Acts  are  prohibitive  and 
not  compulsory;  and  in  not  holding  and  decreeing 
that  the  observance  of  such  terms  would  consist  in 
refraining  from  making  sales  to  other  than  actual 
settlers  in  quantities  exceeding  160  acres  to  any  one 
purchaser,  for  a  price  exceeding  $2.50  an  acre. 

12.  That  the  Court  erred  in  not  holding  that  the 
company,  under  a  complete  and  absolute  grant  to  it, 
with  power  to  sell,  limited  only  as  prescribed,  might 
choose  the  actual  settler,  might  sell  for  any  price 
not  exceeding  $2.50  an  acre,  and  might  sell  in  quan- 
tities of  40,  60  or  100  acres,  or  any  amount  not  ex- 
ceeding 160  acres. 

13.  The  Court  erred  in  not  holding  and  decreeing 
that  there  was  a  complete  and  absolute  grant  to  the 
railroad  company,  with  power  to  sell,  limited  only 
as  prescribed  in  the  Granting  Act  and  Acts;  and 
erred  in  not  holding  and  decreeing  that  there  was 
no  obligation  imposed  upon  the  railroad  company 
to  sell. 

14.  The  Court  erred  in  not  holding  and  decree- 
ing that  the  Granting  Act  and  Acts  did  not  impose 
an  affirmative  obligation  on  the  railroad  company 
to  sell  the  lands,  and  in  not  holding  and  decreeing 
that  the  so-called  settlers'  proviso  or  clause  in  the 
Granting  Act  and  Acts  had  application  only  as  and 
when  the  railroad  company  made  sales  of  the  land. 

15.  The  Court  erred  in  not  holding  and  decree- 


vs.  United  States  of  America.  4'5 

ing  that  the  railroad  company,  so  long  as  the  granted 
lands  were  not  sold  by  it  but  remained  unalienated, 
had  a  complete  and  absolute  title  thereto,  and  under 
such  circumstances,  and  as  the  owner  of  such  a  title; 
had  the  right  to  sell,  cut,  remove,  or  authorize  the 
cutting  or  removal  of  the  timber  thereon;  and  the 
Court  erred  similarly  in  not  so  holding  and  decree- 
ing with  reference  to  any  mineral  or  other  deposits 
in  or  products  out  of  said  land — subject  to  iSuch 
qualification  as  may  arise  from  the  limited  injunc- 
tion referable  to  the  period  of  six  months,  as  ex- 
pressed in  the  opinion  of  the  Supreme  Court. 

16.  The  Court  erred  in  not  holding  and  decree- 
ing that  the  language  of  the  so-called  settlers'  clause 
<or  proviso  in  the  Granting  Act  and  Acts  is  not 
directive,  but  restrictive  only,  and  that  with  this  ex- 
ception, so  far  as  the  said  timber  or  mineral  deposits 
or  other  products  are  concerned,  or  any  or  either  of 
them,  the  grant  of  the  said  lands  was  unqualified. 

17.  The  Court  erred  in  not  holding  and  decree- 
ing that  under  the  said  Granting  Act  and  Acts  the 
railroad  company  had  a  discretion  of  sale  and  the 
choice  of  time  and  settlers;  and  further  erred  in  not 
holding  and  decreeing  that,  pending  the  exercise  of 
such  discretion  by  a  sale  in  accordance  with  the  re- 
quirements of  the  Granting  Act  and  Acts,  the  said 
railroad  company  had  a  complete  and  absolute  grant 
of  the  lands;  and  was  entitled,  as  of  right,  to  the 
timber  thereon  and  to  the  mineral  or  other  de- 
posits therein,  and  to  the  products  of  the  soil  there- 
of; and  was  entitled,  as  of  right,  to  sell,  cut,  and 


46         Oregon  &  California  R.  B.  Co.  et  al. 

remove  such  timber,  or  to  authorize  the  cutting  or 
removal  of  the  same,  and  to  remove,  sell  or  other- 
wise enjoy  mineral  or  other  deposits  therein,  or  any 
products  of  the  soil  thereof — subject  to  any  qualifi- 
cation arising  out  of  the  limited  injunction  referable 
to  the  six  months'  period  above  mentioned. 

18.  The  Court  erred  in  not  holding  and  decree- 
ing that  the  railroad  company,  so  long  as  it  occupied 
the  status  of  an  owner  of  unalienated  lands  within 
the  limits  of  the  grant  and  grants,  had  all  the  rights 
therein  of  a  grantee  in  fee  simple,  including  the 
rights  of  such  grantee  to  the  timber  thereon,  or  to 
the  mineral  or  other  deposits  therein,  or  to  the  pro- 
ducts of  the  soil  thereof — subject  to  any  qualifica- 
tion as  aforesaid,  arising  out  of  said  limited  in- 
junction. 

19.  The  Court  erred  in  not  holding  and  decree- 
ing that  the  provisions  of  the  so-called  settler's  pro- 
viso and  clause  in  the  Granting  Act  and  Acts  were 
not  directive,  but  restrictive  only;  and  erred  in  not 
holding  and  decreeing  that,  subject  to  the  restric- 
tion, the  railroad  company  took  the  grant  and 
grants  with  the  right  to  cut  timber  thereon,  or  open 
and  work  mines  therein,  or  cultivate  the  soil 
thereof,  and  own,  sell,  use  and  enjoy  such  timber, 
or  the  products  of  such  mines,  or  the  cultivation  of 
such  soil — subject  to  any  qualification  as  aforesaid 
arising  out  of  said  limited  injunction. 

20.  The  Court  erred  in  not  holding  and  decree- 
ing that  timber  cut  upon  the  granted  lands,  while 
the  same  remained  unalienated  in  the  railroad  com- 
pany, belonged  to  said  railroad  company;  and  like- 


vs.  United  States  of  America.  47 

wise  as  to  any  minerals  extracted  therefrom,  or  any 
products  of  the  soil  cultivated  thereon — subject  to 
any  qualification  arising  out  of  said  limited  injunc- 
tion, referable  to  the  aforesaid  period  of  six  months. 

21.  The  Court  erred  in  not  holding  and  decree- 
ing that  the  railroad  company  took  the  lands  in  ques- 
tion in  fee  and  was  accordingly  entitled  to  make 
any  use  thereof  not  in  violation  of  the  restrictive 
covenants  found  in  the  so-called  settlers'  proviso 
and  clause  in  the  Granting  Act  and  Acts,  and  not 
in  violation  of  the  limited  injunction  as  aforesaid. 

22.  The  Court  erred  in  making  and  entering  a 
decree  herein  in  modification  and  enlargement  of 
the  terms  of  the  mandate  from  the  Supreme  Court 
of  the  United  States. 

23.  The  Court  erred  in  not  making  and  entering 
a  decree  herein  responsive  to  the  mandate  of  the 
Supreme  Court  of  the  United  States,  without  modi- 
fication or  enlargement,  and  in  the  terms  of  the 
opinion  to  which  the  said  mandate  referred,  and 
which  was  expressive  of  the  mandate  itself. 

24.  The  Court  erred  in  adjudging  and  decreeing 
that  the  complainant  have  and  recover  from  the  de- 
fendants, Oregon  and  California  Eailroad  Company, 
Southern  Pacific  Company,  Stephen  T.  Gage,  indi- 
vidually and  as  trustee,  and  Union  Trust  Company, 
individually  and  as  trustee,  and  each  of  them,  or 
from  any  or  either  of  them,  any  costs  or  disburse- 
ments herein;  and  in  adjudging  and  decreeing  that 
execution  issue  against  the  said  defendants,  or  any 
or  either  of  them,  for  any  costs  or  disbursements 
herein. 


48  Oregon  de  California  R.  E.  Co.  et  al. 

25.  The  Court  erred  in  not  holding  and  decree- 
ing that  no  costs  or  disbursements  should  be  recov- 
ered herein  from  the  Oregon  and  California  Rail- 
road Company,  or  the  Southern  Pacific  Company, 
or  Stephen  T.  Gage,  individually  and  as  trustee,  or 
Union  Trust  Company,  individually  and  as  trustee, 
or  any  or  either  of  them. 

26.  The  Court  erred  in  not  holding  and  decree- 
ing that  the  main  contention  of  the  Government, 
and  the  one  insisted  upon  in  its  bill  of  complaint 
and  at  the  trial  of  the  cause,  was  the  contention  that 
the  so-called  settlers'  clause  and  proviso  in  the 
Granting  Act  and  Acts  was  a  condition  subsequent ; 
and  in  not  holding  and  decreeing  that  the  said  de- 
fendants last  named,  and  each  and  every  of  them, 
were  justified  and  acted  of  right  in  resisting  suck 
contention,  both  below  and  on  appeal;  and  in  not 
holding  and  decreeing  that  inasmuch  as  the  said  de- 
fendants had  prevailed  in  resisting  such  contention, 
it  was  not  equitable  to  tax  them,  or  either  of  them, 
with  costs  and  disbursements  herein  in  favor  of  the 
complainant. 

27.  The  Court  erred  in  not  holding  and  decree- 
ing that  it  was  inequitable  to  impose  costs  herein  in 
favor  of  complainant  on  the  said  defendants ;  and  in 
not  holding  and  decreeing  that  the  case  here  should 
be  disposed  of  without  adjudging  costs  in  favor 
either  of  said  defendants  or  of  the  complainant, 
leaving  each  to  bear  the  costs  of  his  or  its  own  side 
of  the  litigation. 

28.  The  Court  erred  in  not  making  and  entering 
as  and  for  its  decree  in  this  cause,  and  in  place  and 


vs.  United  States  of  America.  4'9 

stead  of  the  decree  made  and  entered  by  it  as  afore- 
said, the  decree  in  the  form  tendered  to  it  by  the  said 
last-named  defendants  and  each  and  every  of 
them — that  is  to  say,  in  not  making  and  entering  as 
its  decree  in  said  cause,  the  following  decree : 

"In  pursuance  of  the  mandate  of  the  Supreme 
Court  of  the  United  States,  filed  in  this  Court  on  the 
8th  day  of  December,  1915,  in  the  above-entitled 
cause,  counsel  for  the  respective  parties  being  pres- 
ent, it  is  by  the  Court  ordered,  adjudged  and  decreed 
as  follows: 

1.  That  the  decree  heretofore  entered  in  said 
cause,  so  far  as  it  affects  the  defendants,  Oregon  and 
California  Railroad  Company,  Southern  Pacific 
Company,  Stephen  T.  Gage,  individually  and  as 
trustee,  Union  Trust  Company,  individually  and  as 
trustee,  hereinafter  called  the  'defendants'  be,  and 
the  same  is  hereby,  set  aside  and  held  for  naught, 
but  is  adhered  to  in  all  respects  as  to  the  defendants 
and  cross-complainants,  hereinafter  called  the 
'cross-complainants'  and  *  interveners. ' 

2.  That  the  said  defendants  and  their  respective 
officers  and  agents  be,  and  each  is  hereby,  enjoined 
from  selling  the  lands,  or  any  part  thereof,  granted 
either  by  the  Act  of  Congress  approved  July  25, 
1866,  as  amended  by  the  Act  of  Congress  of  April 
10,  1869,  or  by  the  Act  of  Congress  approved  May  4, 
1870,  whether  the  said  lands  be  situated  within  the 
place  or  indemnity  limits  of  the  grants  thereby 
made  to  any  person  not  an  actual  settler,  or  in  quan- 
tities greater  than  one-quarter  section  to  one  pur- 


50         Oregon  &  California  R.  E.  Co.  et  al. 

chaser,  or  for  a  price  exceeding  two  dollars  and  a 
half  ($2.50)  per  acre. 

3.  That  the  said  defendants  and  their  respective 
officers  and  agents  be,  and  each  is  hereby,  enjoined 
from  any  disposition  of  the  said  lands  or  any  part 
thereof,  or  of  the  timber  thereon,  and  from  cutting 
or  authorizing  the  cutting  or  removal  of  any  of  the 
timber  thereon,  until  Congress  shall  have  a  reason- 
able opportunity  to  provide  by  legislation  for  the 
disposition  of  said  lands  in  accordance  with  such 
policy  as  it  may  deem  fitting  under  the  circum- 
stances, and  at  the  same  time  secure  to  the  defend- 
ants all  the  value  the  granting  acts  conferred  upon 
the  grantees;  but  if  Congress  does  not  make  such 
provision,  the  defendants  may  apply  to  this  Court, 
within  a  reasonable  time,  not  less  than  six  (6) 
months  from  the  entry  of  the  decree  herein,  for  a 
modification  of  so  much  of  the  injunction  herein 
ordered  as  enjoins  any  disposition  of  the  lands  and 
timber  until  Congress  shall  act." 

WHEREFORE,  this  defendant,  Stephen  T. 
Gage,  individually  and  as  trustee,  prays  that  the 
aforesaid  judgment  and  decree  which  was  made, 
rendered  and  entered  herein  by  the  above-entitled 
Court  in  said  cause  No.  3340  in  Equity,  on  the  9th 
day  of  December,  1915,  and  that  each  of  said  para- 
graphs of  said  judgment  and  decree  be  reversed,  ex- 
cepting paragraph  1  thereof,  wherein  it  is  provided  : 
"That  the  decree  heretofore  entered  in  said 
cause,  so  far  as  it  affects  the  defendants,  Ore- 
gon &  California  Railroad  Company,  Southern 


vs.  United  States  of  America.  51 

Pacific  Company,   Stephen  T.   Gage,  individu- 
ally  and  as   Trustee,   Union   Trust   Company, 
individually  and  as  trustee,  hereinafter  called 
'the  defendants,'  be,   and   the   same   is   hereby 
set  aside  and  held  for  naught,  but  is  adhered 
to  in  all  respects  as  to  the  defendants  and  cross- 
complainants,    hereinafter    called    the     'cross- 
complainants,'  and  the  interveners," 
and  particularly  that  paragraph  2  and  that  para- 
graph 7  of  said  judgment  and  decree  be  reversed, 
and  for  such  other  relief  to  this   defendant,   said 
Oregon    and    California    Railroad    Company,    said 
Southern  Pacific  Company,  and  said  Union  Trust 
Company,  individually  and  as  Trustee,  as  may  be 

proper. 

WM.  F.  HEREIN, 

P.  F.  DUNNE, 

WM.  D.  FENTON, 

Solicitors  and  Attorneys  for  said  Stephen  T.  Gage, 
individually  and  as  Trustee. 
Service  of  the  foregoing  Assignments  of  Errors 
admitted  this  8th  day  of  January,  1916. 
JOHN  W.  DAVIS, 
Solicitor  General  of  the  United  States. 
C.  J.  SMYTH, 
Special  Assistant  to  the  Attorney  General, 
Solicitors  and  Attorneys  for  Appellee. 
CLARENCE  L.  REAMES, 
United  States  Attorney. 
Filed  Jan.  8,  1916.     G.  H.  Marsh,  Clerk. 
And  afterwards,  to  wit,  on  the  8th  day  of  January, 
1916,  there  was  duly  filed  in  said  Court,  and  cause, 
an  Assignment  of  Errors  by  the  Union  Trust  Com- 


52         Oregon  cfr  California  R.  R.  Co.  et  al. 

pany   (individually  and  as  trustee),  in  words  and 
figures  as  follows,  to  wit: 

DEFENDANT  UNION  TRUST  COMPANY'S 
(Individually  and  as  Trustee)  ASSIGNMENT 
OF  ERRORS. 

The  defendant,  Union  Trust  Company,  individu- 
ally and  as  trustee,  complains  of  errors  in  the  pro- 
ceedings in  this  case  in  the  District  Court  of  the 
United  States  for  the  District  of  Oregon,  in  the 
above  cause,  No.  3340  in  Equity,  and  in  the  decision, 
judgment  and  decree  rendered,  made  and  entered 
therein  on  the  9th  day  of  December,  1915,  under  and 
in  alleged  pursuance  of  the  mandate  of  the  Supreme 
Court  of  the  United  States  theretofore  filed  in  said 
cause  on  December  8th,  1915,  and  assigns  the  follow- 
ing as  the  errors  complained  of: 

1.  The  Court  erred  in  making  and  entering  the 
said  decree  of  December  9th,  1915. 

2.  The  Court  erred  in  not  pursuing  the  mandate 
of  the  Supreme  Court  of  the  United  States  thereto- 
fore filed  in  said  cause  on  December  8th,  1915. 

3.  The  said  decree  of  December  9th,  1915,  is  not 
in  pursuance  of  the  said  mandate,  and  the  Court  ac- 
cordingly erred  in  making  and  entering  such  decree. 

4.  The  Court  erred  in  making  and  entering  the 
said  decree  of  December  9th,  1915,  and  each  and 
every  paragraph  thereof. 

5.  The  Court  erred  in  adjudging  and  decreeing, 
as  in  paragraph  2  of  its  decree  set  forth,  "that  the 
defendants  and  their  respective  officers  and  agents 
be,  and  each  is  hereby,  enjoined  from  selling  the 


vs.  United  States  of  America.  53 

lands  or  any  part  thereof  granted  either  by  the  Act 
of  Congress  approved  July  25,  1866,  as  amended  by 
the  Act  of  Congress  of  April  10,  1869,  or  by  the  Act 
of  Congress  approved  May  4,  1870,  whether  the  said 
lands  be  situated  within  the  place  or  indemnity 
limits  of  the  grants  thereby  made,  to  any  person  not 
an  actual  settler  on  the  land  sold  to  him,  or  in  quan- 
tities greater  than  one-quarter  section  to  one  pur- 
chaser, or  for  a  price  exceeding  $2.50  per  acre ;  and 
from  selling  any  of  the  timber  on  said  lands,  or  any 
mineral  or  other  deposits  therein,  except  as  a  part  of 
and  in  conjunction  with  the  land  on  which  the  tim- 
ber stands  or  in  which  the  mineral  or  other  deposits 
are  found ;  and  from  cutting  or  removing  or  author- 
izing the  cutting  or  removal  of  any  of  the  timber 
thereon;  or  from  removing  or  authorizing  the  re- 
moval of  mineral  or  other  deposits  therein,  except 
in  connection  with  the  sale  of  the  land  bearing  the 
timber  or  containing  the  mineral  or  other  deposits. ' ' 

6.  The  Court  erred  in  adding  to  the  term  "actual 
settler,"  in  said  paragraph  2,  the  qualifying  phrase 
"on  the  land  sold  to  him." 

7.  The  Court  erred  in  adjudging  and  decreeing 
that  the  defendants  and  their  respective  officers  and 
agents  be  and  are  by  said  decree  enjoined  from  sell- 
ing any  of  the  timber  on  said  lands,  except  as  a  part 
of  and  in  conjunction  with  the  land  on  which  the 
timber  stands;  also  from  cutting  or  removing,  or 
authorizing  the  cutting  or  removal,  of  any  timber 
thereon,  except  in  connection  with  the  sale  of  the 
land  bearing  the  timber;  also  from  selling  any  min- 
eral or  any  other  deposits  in  said  lands,  except  as  a 


54         Oregon  &  California  R.  R.  Go.  et  ah 

part  of  and  in  conjunction  with  the  land  in  which 
the  mineral  or  other  deposits  are  found;  also  from 
removing  or  authorizing  the  removal  of  mineral  or 
other  deposits  therein,  except  in  connection  with  the 
sale  of  the  land  containing  the  mineral  or  other  de- 
posits. 

8.  The  Court  erred  in  its  said  decree  in  incorpo- 
rating into  and  making  part  of  the  general  injunc- 
tion therein  injunctive  matter  touching  the  sale  of 
the  timber  of  said  lands,  except  as  a  part  of  and  in 
conjunction  with  the  land  on  which  the  timber 
stands;  and  touching  the  cutting  or  removal,  or  the 
authorizing  of  the  cutting  or  removal,  of  any  of  the 
timber  thereon,  except  in  connection  with  the  sale 
of  the  land  bearing  such  timber;  likewise  touching 
the  sale  of  any  mineral  or  other  deposits  in  said 
lands,  except  as  part  of  and  in  conjunction  with  the 
land  in  which  the  mineral  or  other  deposits  are 
found ;  and  also  touching  the  removal  or  the  author- 
izing of  the  removal  of  mineral  or  other  deposits  in 
said  land,  except  in  connection  with  the  sale  of  the 
land  containing  such  mineral  or  other  deposits. 

9.  The  Court  erred  in  not  holding  and  decreeing 
that  there  was  a  complete  and  absolute  grant  in  this 
case  to  the  railroad  company,  with  power  to  sell, 
limited  only  as  prescribed  by  the  Granting  Act  and 
Acts. 

10.  The  Court  erred  in  not  holding  and  decree- 
ing that  the  language  of  the  grants  herein  and  of  the 
limitations  upon  them  is  general,  and  that  it  was  not 
competent  to  the  said  Court  to  attach  exceptions 
thereto  in  its  decree. 


vs.  United  States  of  America.  55 

11.  The  Court  erred  in.  not  holding  and  decreeing 
that  the  terms  of  the  Settlers'  Proviso  or  clause  in 
the  Granting  Act  and  Acts  are  prohibitive  and  not 
compulsory;  and  in  not  holding  and  decreeing  that 
the  observance  of  such  terms  would  consist  in  re- 
fraining from  making  sales  to  other  than  actual  set- 
tlers in  quantities  exceeding  160  acres  to  any  one 
purchaser,  for  a  price  exceeding  $2.50  an  acre. 

12.  The  Court  erred  in  not  holding  that  the  com- 
pany, under  a  complete  and  absolute  grant  to  it,  with 
power  to  sell,  limited  only  as  prescribed,  might 
choose  the  actual  settler,  might  sell  for  any  price 
not  exceeding  $2.50  an  acre,  and  might  sell  in  quan- 
tities of  40,  60,  or  100  acres,  or  any  amount  not  ex- 
ceeding 160  acres. 

13.  The  Court  erred  in  not  holding  and  decree- 
ing that  there  was  a  complete  and  absolute  grant  to 
the  railroad  company,  with  power  to  sell,  limited 
only  as  prescribed  in  the  Granting  Act  and  Acts; 
and  erred  in  not  holding  and  decreeing  that  there 
was  no  obligation  imposed  upon  the  railroad  com- 
pany to  sell. 

14.  The  Court  erred  in  not  holding  and  decree- 
ing that  the  Granting  Act  and  Acts  did  not  impose 
an  affirmative  obligation  on  the  railroad  company  to 
sell  the  lands,  and  in  not  holding  and  decreeing  that 
the  so-called  Settlers  Proviso  or  clause  in  the  Grant- 
ing Act  and  Acts  had  application  only  as  and  when 
the  railroad  company  made  sales  of  the  land. 

15.  The  Court  erred  in  not  holding  and  decree- 
ing that  the  railroad  company,  so  long  as  the  granted 
lands  were  not  sold  by  it  but  remained  unalienated, 


56         Oregon  &  California  B.  R.  Co.  et  al. 

had  a  complete  and  absolute  title  thereto,  and  under 
such  circumstances,  and  as  the  owner  of  such  a  title, 
had  the  right  to  sell,  cut,  remove,  or  authorize  the 
cutting  or  removal  of  the  timber  thereon;  and  the 
Court  erred  similarly  in  not  so  holding  and  decree- 
ing with  reference  to  any  mineral  or  other  deposits 
in  or  products  out  of  said  lands — subject  to  such 
qualification  as  may  arise  from  the  limited  injunc- 
tion referable  to  the  period  of  six  months,  as  ex- 
pressed in  the  opinion  of  the  Supreme  Court. 

16.  The  Court  erred  in  not  holding  and  decree- 
ing that  the  language  of  the  so-called  Settlers  Clause 
or  proviso  in  the  Granting  Act  and  Acts  is  not  direc- 
tive, but  restrictive  only,  and  that  with  this  excep- 
tion, so  far  as  the  said  timber  or  mineral  deposits  or 
other  products  are  concerned,  or  any  or  either  of 
them,  the  grant  of  the  said  lands  were  unqualified. 

17.  The  Court  erred  in  not  holding  and  decree- 
ing that  under  the  said  Granting  Act  and  Acts  the 
railroad  company  had  a  discretion  of  sale  and  the 
choice  of  time  and  settlers ;  and  further  erred  in  not 
holding  and  decreeing  that,  pending  the  exercise  of 
such  discretion  by  a  sale  in  accordance  with  the 
requirements  of  the  Granting  Act  and  Acts,  the  said 
railroad  company  had  a  complete  and  absolute  grant 
of  the  lands ;  and  was  entitled  as  of  right,  to  the  tim- 
ber thereon  and  to  the  mineral  or  other  deposits 
therein,  and  to  the  products  of  the  soil  thereof ;  and 
was  entitled,  as  of  right,  to  sell,  cut  and  remove  such 
timber,  or  to  authorize  the  cutting  or  removal  of  the 
same,  and  to  remove,  sell  or  otherwise  enjoy  min- 
eral or  other  deposits  therein,  or  any  products  of 


vs.  United  States  of  America.  57 

the  soil  thereof — subject  to  any  qualification  arising 
out  of  the  limited  injunction  referable  to  the  six 
months'  period  above  mentioned. 

18.  The  Court  erred  in  not  holding  and  decree- 
ing that  the  railroad  company,  so  long  as  it  occupied 
the  status  of  an  owner  of  unalienated  lands  within 
the  limits  of  the  grant  and  grants,  had  all  the  rights 
therein  of  a  grantee  in  fee  simple,  including  the 
rights  of  such  grantee  to  the  timber  thereon,  or  to 
the  mineral  or  other  deposits  therein,  or  to  the  pro- 
ducts of  the  soil  thereof — subject  to  any  qualifica- 
tion as  aforesaid,  arising  out  of  said  limited  injunc- 
tion. 

19.  The  Court  erred  in  not  holding  and  decree- 
ing that  the  provisions  of  the  so-called  Settlers  Pro- 
viso and  clause  in  the  Granting  Act  and  Acts  were 
not  directive,  but  restrictive  only ;  and  erred  in  not 
holding  and  decreeing  that,  subject  to  the  restric- 
tion, the  railroad  company  took  the  grant  and  grants 
with  the  right  to  cut  timber  thereon,  or  open  and 
work  mines  therein,  or  cultivate  the  soil  thereof,  and 
own,  sell,  use  and  enjoy  such  timber,  or  the  products 
of  such  mines,  or  the  cultivation  of  such  soil — sub- 
ject to  any  qualification  as  aforesaid  arising  out  of 
said  limited  injunction. 

20.  The  Court  erred  in  not  holding  and  decree- 
ing that  timber  cut  upon  the  granted  lands,  while  the 
same  remained  unalienated  in  the  railroad  company, 
belonged  to  said  railroad  company ;  and  likewise  as 
to  any  minerals  extracted  therefrom,  or  any  pro- 
ducts of  the  soil  cultivated  thereon — subject  to  any 
qualification  arising  out  of  said  limited  injunction, 


58         Oregon  <&  California  R.  R.  Co.  et  al. 

referable  to  the  aforesaid  period  of  six  months. 

21.  The  Court  erred  in  not  holding  and  decree- 
ing that  the  railroad  company  took  the  lands  in  ques- 
tion in  fee  and  was  accordingly  entitled  to  make  any 
use  thereof  not  in  violation  of  the  restrictive  coven- 
ants found  in  the  so-called  Settlers  Proviso  and 
clause  in  the  Granting  Act  and  Acts,  and  not  in  vio- 
lation of  the  limited  injunction  as  aforesaid. 

22.  The  Court  erred  in  making  and  entering  a 
decree  herein  in  modification  and  enlargement  of 
the  terms  of  the  mandate  from  the  Supreme  Court 
of  the  United  States. 

23.  The  Court  erred  in  not  making  and  entering 
a  decree  herein  responsive  to  the  mandate  of  the 
Supreme  Court  of  the  United  States,  without  modi- 
fication or  enlargement,  and  in  the  terms  of  the  opin- 
ion to  which  the  said  mandate  referred,  and  which 
wTas  expressive  of  the  mandate  itself. 

24.  The  Court  erred  in  adjudging  and  decreeing 
that  the  complainant  have  and  recover  from  the  de- 
fendants, Oregon  and  California  Railroad  Company, 
Southern  Pacific  Company,  Stephen  T.  Gage,  indi- 
vidually and  as  trustee,  and  Union  Trust  Company, 
individually  and  as  trustee,  and  each  of  them,  or 
from  any  or  either  of  them,  any  costs  or  disburse- 
ments herein,  and  in  adjudging  and  decreeing  that 
execution  issue  against  the  said  defendants  or  any 
or  either  of  them,  for  any  costs  or  disbursements 
herein. 

25.  The  Court  erred  in  not  holding  and  decreeing 
that  no  costs  or  disbursements  should  be  recovered 
herein  from   the   Oregon   and   California   Railroad 


vs.  United  States  of  America.  59 

Company,  or  the  Southern  Pacific  Company,  or 
Stephen  T.  Gage,  individually  and  as  trustee,  or 
Union  Trust  Company,  individually  and  as  trustee, 
or  any  or  either  of  them. 

26.  The  Court  erred  in  not  holding  and  decreeing 
that  the  main  contention  of  the  Government,  and  the 
one  insisted  upon  in  its  bill  of  complaint  and  at  the 
trial  of  the  cause,  was  the  contention  that  the  so- 
called  Settlers  Clause  and  proviso  in  the  Granting 
Act  and  Acts  was  a  condition  subsequent;  and  in  not 
holding  and  decreeing  that  the  said  defendants  last 
named,  and  each  and  every  of  them,  were  justified 
and  acted  of  right  in  resisting  such  contention,  both 
below  and  on  appeal;  and  in  not  holding  and  decree- 
ing that  inasmuch  as  the  said  defendants  had  pre- 
vailed in  resisting  such  contention,  it  was  not  equi- 
table to  tax  them  or  either  of  them  with  costs  and 
disbursements  herein  in  favor  of  the  complainant. 

27.  The  Court  erred  in  not  holding  and  decreeing 
that  it  was  inequitable  to  impose  costs  herein  in 
favor  of  complainant  on  the  said  defendants ;  and  in 
not  holding  and  decreeing  that  the  case  here  should 
be  disposed  of  without  adjudging  costs  in  favor 
either  of  said  defendants  or  of  the  complainant, 
leaving  each  to  bear  the  costs  of  his  or  its  own  side 
of  the  litigation. 

28.  The  Court  erred  in  not  making  and  entering 
as  and  for  its  decree  in  this  cause,  and  in  place  and 
stead  of  the  decree  made  and  entered  by  it  as  afore- 
said, the  decree  in  the  form  tendered  to  it  by  said 
last-named  defendants  and  each  and  every  of  them : 
— that  is  to  say,  in  not  making  and  entering  as  its  de- 


60         Oregon  &  California  R.  R.  Co.  et  al. 

cree  in  said  cause  the  following  decree: 

"In  pursuance  of  the  mandate  of  the  Supreme 
Court  of  the  United  States,  filed  in  this  court  on  the 
8th  day  of  December,  1915,  in  the  above-entitled 
cause,  counsel  for  the  respective  parties  being  pres- 
ent, it  is  by  the  Court  ordered,  adjudged  and  decreed 
as  follows: 

1.  That  the  decree  heretofore  entered  in  said 
cause,  so  far  as  it  affect  the  defendants  Oregon  and 
California  Railroad  Company,  Southern  Pacific 
Company,  Stephen  T.  Gage,  individually  and  as  trus- 
tee, Union  Trust  Company,  individually  and  as  trus- 
tee, hereinafter  called  the  'defendants,'  be  and  the 
same  is  hereby  set  aside  and  held  for  naught,  but  is 
adhered  to  in  all  respects  as  to  the  defendants  and 
cross-complainants,  hereinafter  called  the  'cross- 
complainants'  and  'interveners.' 

2.  That  the  said  defendants  and  their  respective 
officers  and  agents  be,  and  each  is  hereby,  enjoined 
from  selling  the  lands,  or  any  part  thereof,  granted 
either  by  the  Act  of  Congress  approved  July  25, 
1866,  as  amended  by  the  Act  of  Congress  of  April  10, 

1869,  or  by  the  Act  of  Congress  approved  May  4, 

1870,  whether  the  said  lands  be  situated  within  the 
place  or  indemnity  limits  of  the  grants  thereby  made 
to  any  person  not  an  actual  settler,  or  in  quantities 
greater  than  one-quarter  section  to  one  purchaser, 
or  for  a  price  exceeding  two  dollars  and  a  half 
($2.50)  per  acre. 

3.  That  the  said  defendants  and  their  respective 
officers  and  agents  be,  and  each  is  hereby,  enjoined 
from  any  disposition  of  the  said  lands  or  any  part 


vs.  United  States  of  America.  61 

thereof,  or  of  the  timber  thereon,  and  from  cutting 
or  authorizing  the  cutting  or  removal  of  any  of  the 
timber  thereon,  until  Congress  shall  have  a  reason- 
able opportunity  to  provide  by  legislation  for  the 
disposition  of  said  lands  in  accordance  with  such  pol- 
icy as  it  may  deem  fitting  under  the  circumstances, 
and  at  the  same  time  secure  to  the  defendants  all  the 
value  the  granting  acts  conferred  upon  the  grantees; 
but  if  Congress  does  not  make  such  provision,  the 
defendants  may  apply  to  this  Court,  within  a  reason- 
able time,  not  less  than  six  (6)  months  from  the 
entry  of  the  decree  herein,  for  a  modification  of  so 
much  of  the  injunction  herein  ordered  as  enjoins 
any  disposition  of  the  lands  and  timber  until  Con- 
gress shall  act." 

WHEREFORE,    this    defendant,    Union    Trust 
Company,  individually  and  as  trustee,  prays  that  the 
aforesaid  judgment   and  decree   which  was  made, 
rendered  and  entered  herein  by  the  above-entitled 
court  in  said  cause  No.  3340  in  Equity,  on  the  9th 
day  of  December,  1915,  and  that  each  of  said  para- 
graphs of  said  judgment  and  decree  be  reversed,  ex- 
cepting paragraph  1  thereof,  wherein  it  is  provided: 
"That  the  decree  heretofore  entered  in  said 
cause  so  far  as  it  affects  the  defendants,  Ore- 
gon &  California  Railroad  Company,  Southern 
Pacific  Companj^,  Stephen  T.  Gage,  individually 
and  as  trustee,  Union  Trust  Company,  individu- 
ally   and    as    trustee,    hereinafter    called    'the 
defendants,'  be,  and   the   same   is   hereby,    set 
aside  and  held  for  naught,  but  is  adhered  to  in 
all  respects  as  to  the  defendants  and  crosscom- 


62         Oregon  &  California  B.  R.  Co.  et  al. 

plainants,  hereinafter  called  the  'cross-com- 
plaiants'  and  the  interveners," 
and  particularly  that  paragraph  2  and  that  para- 
graph 7  of  said  judgment  and  decree  be  reversed, 
and  for  such  other  relief  to  this  defendant,  said  Ore- 
gon &  California  Railroad  Company,  said  Southern 
Pacific  Company,  and  said  Stephen  T.  Gage,  indi- 
vidually and  as  trustee,  as  may  be  proper. 

MILLER,  KING,  LANE  &  TRAFFORD, 
DOLPH,  MALLORY,  SIMON  &  GEARIN, 
JOHN  C.  SPOONER,  JOHN  M.  GEARIN, 
Solicitors  for  said  Union  Trust  Company,  Individu- 
ally and  as  Trustee. 
Service  of  the  foregoing  Assignments  of  Errors 
admitted  this  8th  day  of  January,  1916. 

JOHN  W.  DAVIS, 
Solicitor-General  of  the  United  States. 
C.  J.  SMYTH, 
Special  Assistant  to  the  Attorney-General, 
Solicitors  and  Attorneys  for  Appellee. 
CLARENCE  L.  REAMES, 
United  States  Attorney. 
Filed  January  8,  1916.     G.  H.  Marsh,  Clerk. 

The  following  stipulation,  relative  to  the  record 
on  appeal  was  made  and  the  following  order  entered: 

STIPULATION    RELATIVE    TO    RECORD    ON 

APPEAL. 

IT  IS  HEREBY  STIPULATED  by  and  between 
the  complainant.  United  States  of  America,  and  the 
defendants  above  named,  and  each  of  them,  as  fol- 
lows: 

1.     That  on  the  appeal  taken  by  the  above-named 


vs.  United  States  of  America.  63 

defendants  on  the  8th  day  of  January,  1916,  to  the 
United  States  Circuit  Court,  of  Appeals  for  the 
Ninth  Circuit  from  the  judgment  and  decree  made 
and  entered  in  the  United  States  District  Court  for 
the  District  of  Oregon  in  said  cause  No.  3340  in 
Equity,  on  December  9, 1915,  said  United  States  Cir- 
cuit Court  of  Appeals  may,  in  so  far  as  the  same  may 
be  relevant  or  material,  consider  the  printed  tran- 
script of  the  record  filed  in  said  Circuit  Court  of 
Appeals  on  the  former  appeals  taken  in  said  cause 
No.  3340  from  the  decree  of  said  United  States  Dis- 
trict Court,  entered  July  1,  1913,  and  may  consider 
any  part  or  portions  of  said  transcript,  including  the 
pleadings  in  the  cause,  the  statement  of  the  evidence 
and  the  exhibits  or  any  of  them  contained  in  said 
printed  transcript  of  record. 

2.  That  in  the  even  that  said  United  States  Cir- 
cuit Court  of  Appeals  should  certify  to  the  Supreme 
Court  of  the  United  States  any  questions  or  ques- 
tion or  propositions  or  proposition  of  law  upon 
which  it  desires  the  instruction  of  that  court  for 
its  proper  decision  in  passing  upon  the  aforesaid 
appeal  or  that  said  Supreme  Court  should  require 
that  the  whole  record  and  cause  be  sent  up  to  it 
for  its  consideration,  or  in  the  event  that  an  ap- 
peal should  be  prosecuted  to  said  Supreme  Court 
from  any  judgment  rendered  on  the  aforesaid  ap- 
peal of  said  cause  taken  on  said  8th  day  of  Janu- 
ary, 1916,  to  said  United  States  Circuit  Court  of 
Appeals  or  that  said  appeal  taken  on  January  8, 
1916,    should   in   any   other   manner   be   hereafter 


64         Oregon  &  California  R.  R.  Co.  et  at. 

brought  on  for  hearing  in  said  Supreme  Court,  said 
Supreme  Court  of  the  United  States  may,  in  so  far 
as  the  same  may  be  relevant  or  material,  consider 
the  printed  transcript  of  the  record  on  the  aforesaid 
former  appeals  in  said  cause,  which  is  now  on  file  in 
said  Supreme  Court,  including  the  pleadings,  the 
statement  of  the  evidence  and  the  exhibits  or  any 
of  them  contained  in  said  printed  transcript  of 
record. 

3.  Such  printed  transcript  of  the  record  on  said 
former  appeals,  as  now  on  file  in  said  Circuit  Court 
of  Appeals  and  also  on  file  in  said  Supreme  Court, 
shall  be  deemed  a  part  of  the  record  on  the  aforesaid 
appeal  taken  on  January  8,  1916,  to  said  Circuit 
Court  of  Appeals,  and  on  any  appeal  which  may  be 
taken  to  said  Supreme  Court  from  the  judgment  of 
said  Circuit  Court  of  Appeals  rendered  on  said  last- 
mentioned  appeal  or  in  any  other  hearing  growing 
out  of  said  appeal  which  may  be  had  before  said 
Supreme  Court  as  in  last  above  paragraph  hereof 
mentioned;  and,  as  such,  it  may,  in  so  far  as  the  same 
may  be  deemed  relevant  or  material,  be  referred  to 
by  counsel  of  any  of  the  parties  hereto,  either  in  said 
Circuit  Court  of  Appeals  or  in  said  Supreme  Court. 

4.  There  shall  not  be  included  or  printed  in  the 
transcript  of  record  on  the  aforesaid  appeal  taken 
by  defendants  on  January  8,  1916,  to  said  United 
States  Circuit  Court  of  Appeals,  any  of  the  plead- 
ings, papers  or  documents  filed,  or  proceedings  had, 
in  said  United  States  District  Court  in  said  cause 
prior  to  December  8, 1915,  and  the  clerk  of  the  court, 
in  making,  and  directing  the  printing  of,  said  tran- 


vs.  United  States  of  America.  65 

script  of  record,  shall  omit  therefrom  any  of  said 
pleadings,  papers,  documents  or  proceedings  filed 
or  had  in  said  court  and  cause  prior  to  December  8, 
1915 — provided,  however,  that  it  may  be  stated  or 
shown  in  said  transcript  on  what  date  the  mandate 
issued  by  said  Supreme  Court  upon  its  opinion  ren- 
dered June  21,  1915,  on  the  former  appeals  in  the 
cause  (No.  679 — October  term,  1914)  was  received 
by  the  clerk  of  said  United  States  District  Court. 
Said  clerk  shall  include,  among  the  other  papers, 
documents,  files  and  proceedings  to  be  incorporated 
in  said  transcript,  a  copy  of  said  opinion  of  the  Su- 
preme Court  and  also  a  copy  of  the  aforesaid  man- 
date of  said  Supreme  Court  filed  in  said  cause  in  said 
District  Court  on  December  8,  1915,  omitting,  how- 
ever, from  the  latter,  any  copy  of  the  copy  of  the  for- 
mer decree  of  said  United  States  District  Court  made 
and  entered  July  1,  1913,  which  is  embodied  in  and 
forms  a  part  of  said  mandate.  A  copy  of  said  for- 
mer decree  shall  not  be  printed  in  said  transcript  of 
record  as  a  part  of  said  mandate,  but  in  the  copy  of 
the  mandate  as  printed  in  said  transcript,  said  for- 
mer decree  may  be  referred  to  by  reference  to  the 
volume  and  pages  of  the  record  on  the  former  ap- 
peals taken  in  said  cause  wherein  a  copy  of  said  for- 
mer decree  is  set  out. 

5.  If  any  statement  of  the  record  or  statement  on 
appeal  which  may  be  prepared  by  the  appellants  or 
any  of  them  they  may  wish  to  insert  a  copy  of  said 
mandate  in  and  as  a  part  of  said  statement,  they 
need  not  incorporate  in  said  statement  of  the  record 


06         Oregon  &  California  B.  R.  Co.  et  dl. 

or  statement  on  appeal  or  in  any  statement  of  the 
record  or  statement  on  appeal  which  may  be  filed  by 
any  of  them  in  said  cause,  a  copy  of  said  former 
decree  in  said  District  Court  entered  July  1,  1913, 
but  they  may  in  said  copy  of  the  mandate  simply  re- 
fer to  said  former  decree  by  reference  to  the  volume 
and  pages  of  the  record  on  said  former  appeals 
wherein  a  copy  of  said  former  decree  is  set  out. 

6.  It  is  further  stipulated  that  an  order  of  this 
court  may  be  made  upon  this  stipulation  containing 
the  provisions  and  substantially  in  the  language  as 
above  set  forth  in  paragraphs  4  and  5  hereof. 

7.  It  is  further  understood  and  agreed  that  the 
complainant  denies  the  right  of  the  defendants  to 
appeal  to  the  Circuit  Court  of  Appeals  from  the  de- 
cree entered  by  said  United  States  District  Court  on 
December  9,  1915,  denies  the  jurisdiction  of  said 
Circuit  Court  of  Appeals  to  hear  and  determine  said 
appeal  and  reserves  its  right  to  object  to  the  defend- 
ants prosecuting  said  appeal  and  to  the  jurisdiction 
of  the  Circuit  Court  of  Appeals  in  the  matter  and 
this  stipulation  shall  not  in  any  wise  prejudice  said 
rights  or  any  of  them,  or  the  right  of  the  complain- 
ant to  insist  upon  them,  but  in  the  event  that  said 
Circuit  Court  of  Appeals  takes  jurisdiction  the  com- 
plainant does  not  waive  but  reserves  any  right  it 
may  have  to  confine  the  inquiry  of  the  court  on  the 
appeal  to  a  consideration  of  said  mandate  of  the 
Supreme  Court  of  the  United  States  and  the  decree 
of  said  District  Court  entered  December  9,  1915. 

8.  It  is  further  stipulated  and  agreed  in  this  re- 
gard that  the  sole  purpose  of  this  stipulation  is  to 


vs.  United  States  of  America.  67 

save  expense  in  the  printing  of  the  record  and  to 
avoid  any  duplication  of  the  record  on  the  present 
appeal. 
Dated  February  1st,  1916. 

CLARENCE  L.  REAMES, 
United  States  Attorney  for  Oregon  for  and  by  direc- 
tion  of  the   Attorney-General   of  the   United 
States,  of  Solicitors  and  Attorneys  for  Com- 
plainant. 

WM.  F.  HERRIN, 
P.  F.  DUNNE  and 
WM.  D.  FENTON, 
Solicitors   for   Oregon   and   California   R.   R.    Co., 
Southern  Pacific  Co.  and  Stephen  T.  Gage,  in- 
dividually and  as  trustee, 
MILLER,  KING,  LANE  &  TRAFFORD, 
DOLPH,  MALLORY,  SIMON  &  GEARIN, 
Solicitors  for  Union  Trust  Company  Individually 
and  as  Trustee. 
Filed  February  1,  1916.     G.  H.  Marsh,  Clerk. 

And  afterwards,  to  wit,  on  Tuesday,  the  1st  day 
of  February,  1916  the  same  being  the  80th  judicial 
day  of  the  regular  November,  1915,  term  of  said 
Court ;  present :  the  Honorable  Charles  E.  Wolverton, 
United  States  District  Judge  presiding,  the  follow- 
ing proceedings  were  had  in  said  cause,  to  wit : 

ORDER  REGARDING  PRINTING  OF 
RECORD. 

This  cause  came  on  for  hearing  this  day  upon 
stipulation  of  the  respective  parties,  dated  January 
— ,  1916,  as  to  the  printing  of  the  record  on  the  ap- 


68         Oregon  &-  California  R.  R.  Co.  et  al. 

peal  of  the  defendants,  taken  to  the  United  States 
Circuit  Court  of  Appeals  for  the  Ninth  Circuit,  from 
the  decree  of  this  court  entered  December  9,  1915, 
and  as  to  the  use  in  said  Circuit  Court  of  Appeals 
and  in  the  Supreme  Court  of  the  United  States,  as  a 
part  of  the  record  on  appeal,  of  the  printed  tran- 
script of  record  of  the  former  appeals  taken  in  above 
cause  No.  3340  from  the  decree  of  said  District  Court 
for  the  District  of  Oregon  entered  July  1,  1913,  and 
it  appearing  to  the  Court  that  the  parties  have  made 
and  filed  a  written  stipulation  wherein  it  is  provided, 
among  other  things,  that  an  order  substantially  to 
the  following  effect  may  be  made   by  this  Court : 

It  is  now  therefore  ordered  that : 

1.  There  shall  not  be  included  or  printed  in  the 
transcript  of  record  on  the  aforesaid  appeal  taken  by 
defendants  on  January  8, 1916,  to  said  United  States 
Circuit  Court  of  Appeals  any  of  the  pleadings, 
papers  or  documents  filed,  or  proceedings  had,  in  said 
United  States  District  Court  in  said  cause  prior  to 
December  8,  1915,  and  the  clerk  of  the  court,  in  mak- 
ing, and  directing  the  printing  of,  said  transcript 
of  record,  shall  omit  therefrom  any  of  said  plead- 
ings, papers,  documents  or  proceedings  filed  or  had 
in  said  court  and  cause  prior  to  December  8,  1915 — 
provided,  however,  that  it  may  be  stated  or  shown  in 
said  transcript  on  what  date  the  mandate  issued  by 
said  Supreme  Court  upon  its  opinion  rendered  June 
21,  1915,  on  the  former  appeal  of  the  cause  (No.  679 
— October  term,  1914)  was  received  by  the  clerk  of 
said  United  States  District  Court.  Said  clerk  shall 
include,  among  the  other  papers,  documents,  files  and 


vs.  United  States  of  America.  69 

proceedings  to  be  incorporated  in  said  transcript,  a 
copy  of  said  opinion  of  the  Supreme  Court  and  also 
a  copy  of  the  aforesaid  mandate  of  said  Supreme 
Court  filed  in  said  cause  in  said  District  Court  on 
December  8,  1915,  omitting,  however,  from  the  latter, 
any  copy  of  the  copy  of  the  former  decree  of  said 
United  States  District  Court  made  and  entered  July 
1,  1913,  which  is  embodied  in  and  forms  a  part  of 
said  mandate.  A  copy  of  said  former  decree  shall 
not  be  printed  in  said  transcript  of  record  as  a  part 
of  said  mandate,  but  in  the  copy  of  the  mandate  as 
printed  in  said  transcript,  said  former  decree  may 
be  referred  to  by  reference  to  the  volume  and  pages 
of  the  record  on  the  former  appeals  taken  in  said 
cause  wherein  a  copy  of  said  former  decree  is  set  out. 

2.  If  in  any  statement  of  the  record  or  statement 
on  appeal  which  may  be  prepared  by  the  appellants 
or  any  of  them  they  may  wish  to  insert  a  copy  of  said 
mandate  in  and  as  a  part  of  said  statement,  they 
need  not  incorporate  in  said  statement  of  the  record 
or  statement  on  appeal  or  in  any  statement  of  the 
record  or  statement  on  appeal  which  may  be  filed  by 
any  of  them  in  said  cause,  a  copy  of  said  former  de- 
cree in  said  District  Court  entered  July  1,  1913,  but 
they  may  in  said  copy  of  the  mandate  simply  refer 
to  said  former  decree  by  reference  to  the  volume  and 
pages  of  the  record  on  said  former  appeals  wherein  a 
copy  of  said  former  decree  is  set  out. 

3.  This  order  is  without  prejudice  to  the  right  of 
the  complainant  to  object  to  the  right  of  the  defend- 
ants to  take  said  appeal  and  to  the  power  of  the  court 
of  appeals  to  hear  and  determine  it  and  is  not  to  be 


70         Oregon  &  California  R.  R.  Co.  et  al. 

construed  as  a  waiver  of  any  right  the  complainant 
has  to  object  to  the  defendants  taking  said  appeal  or 
to  the  Circuit  Court  of  Appeals  hearing  and  deter- 
mining it  or  as  a  waiver  of  its  right  to  have  the  court 
of  appeals  confine  its  inquiry  on  the  appeal  to  the 
mandate  of  said  Supreme  Court  and  the  decree  of 
this  court,  entered  December  9,  1915. 

Dated  February  1st,  1916. 

CHAS.  E.  WOLVERTON, 
Judge  of  said  District  Court. 

Filed  February  1,  1916.     G.  H.  Marsh,  Clerk. 

The  costs  which  the  decree  of  the  District  Court 
provides  for  were  fixed  at  $6,249.02,  by  order  of  the 
District  Court,  as  follows : 

ORDER  TAXING  COSTS. 
Heretofore  and  on  the  16th  day  of  December,  1915, 
the  complainant,  the  United  States  of  America,  filed 
herein  its  duly  verified  cost  bill  claiming  costs  against 
the  defendants  Oregon  &  California  Railroad  Com- 
pany, Southern  Pacific  Company,  Stephen  T.  Gage, 
individually  and  as  trustee,  and  Union  Trust  Com- 
pany, individually  and  as  trustee,  in  the  sum  of 
$6,249.02  and  thereafter  and  on  the  18th  day  of 
December,  1915,  the  defendants,  Oregon  &  California 
Railroad  Company,  Southern  Pacific  Company,  Ste- 
phen T.  Gage,  individually  and  as  trustee,  and  the 
Union  Trust  Company,  individually  and  as  trustee, 
filed  herein  their  duly  verified  objections  to  said  cost 
bill,  by  which  said  objections  the  said  defendants  ob- 
jected to  the  allowance  of  $350.00  for  the  depositions 
of  seventy  witnesses : 


vs.  United  States  of  America.  71 

Thereafter,  and  on  the  27th  day  of  December,  1915, 
the  matter  came  on  regularly  to  be  heard,  the  object- 
ing defendants  being  present  and  represented  by 
William  D.  Fenton  and  John  M.  Gearin  of  their  at- 
torneys, and  the  complainant  being  represented  by 
Clarence  L.  Reames,  United  States  Attorney  for  the 
District  of  Oregon,  and  the  Court  having  sat  and 
heard  the  statements  and  arguments  of  counsel  and 
having  taken  the  matter  under  advisement  to  be 
passed  upon  at  a  later  date, 

Now,  the  Court  being  fully  advised  in  the  premises, 
it  is  ordered  and  adjudged  that  said  objections  be 
and  the  same  hereby  are  overruled  and  the  clerk  is 
directed  to  tax  as  costs  and  disbursements  against 
the  said  defendants,  Oregon  &  California  Railroad 
Company,  Southern  Pacific  Company,  Stephen  T. 
Gage,  individually  and  as  trustee,  and  the  Union 
Trust  Company,  individually  and  as  trustee,  the 
following  items,  to  wit: 

Clerk's  fees $   383.75 

Marshal's  fees 269.47 

Attorney's  fees 40.00 

Depositions  of  70  witnesses  before  special 

examiner  350.00 

Examiner's  fees 1,942.50 

Witness  fees  (as  appears  from  the  records 

or  the  marshal's  office  and  the  clerk's  office 

showing  payment)   3,263.30 

Total  taxed  at $6,249.02 


72         Oregon  &  California  R.  R.  Co.  et  al. 

Done  in  open  court  this  the  3d  day  of  January, 
1916. 

CHAS.  E.  WOLVEKTON,  Judge. 

Filed  January  3,  1916.     G.  H.  Marsh,  Clerk. 

On  May  8th,  1916,  the  appeals  from  the  decree  of 
December  9th,  1915,  came  on  before  this  court  for 
hearing. 

The  appellants  contended  in  substance: 

I. 

The  Court  erred  in  adjudging  and  decreeing,  as 
in  paragraph  2  of  its  decree  set  forth,  "that  the  de- 
fendants and  their  respective  officers  and  agents  be, 
and  each  is  hereby,  enjoined  from  selling  the  lands 
or  any  part  thereof  granted  either  by  the  Act  of  Con- 
gress approved  July  25,  1866,  as  amended  by  the  Act 
of  Congress  of  April  10,  1869,  or  by  the  Act  of  Con- 
gress approved  May  4,  1870,  whether  the  said  lands 
be  situated  within  the  place  or  indemnity  limits  of 
the  grants  thereby  made,  to  any  person  not  an  actual 
settler  on  the  land  sold  to  him,  or  in  quantities  greater 
than  one-quarter  section  to  one  purchaser,  or  for  a 
price  exceeding  $2.50  per  acre ;  and  from  selling  any 
of  the  timber  on  said  lands,  or  any  mineral  or  other 
deposits  therein,  except  as  a  part  of  and  in  conjunc- 
tion with  the  land  on  which  the  timber  stands  or  in 
which  the  mineral  or  other  deposits  are  found;  and 
from  cutting  or  removing  or  authorizing  the  cutting 
or  removal  of  any  of  the  timber  thereon;  or  from 
removing  or  authorizing  the  removal  of  mineral  or 
other  deposits  therein,  except  in  connection  with  the 
sale  of  the  land  bearing  the  timber  or  containing  the 
mineral  or  other  deposits." 


vs.  United  States  of  America.  73 

II. 

And  more  particularly,  that  the  Court  erred,  in 
said  paragraph  two  of  its  decree,  in  enjoining  the 
defendants  "from  selling  any  of  the  timber  on  said 
lands,  or  anty  mineral  or  other  deposits  therein,  ex- 
cept as  a  part  of  and  in  conjunction  with  the  land 
on  which  the  timber  stands,  or  in  which  the  mineral 
or  other  deposits  are  found,  and  from  cutting  or  re- 
moving, or  authorizing  the  cutting  or  removal  of  any 
of  the  timber  thereon,  or  from  removing  or  authoriz- 
ing the  removal  of  mineral  or  other  deposits  therein, 
except  in  connection  with  the  sale  of  the  land  bearing 
the  timber  or  containing  the  mineral  or  other  de- 
posits." 

The  Court  erred  in  adding  to  the  term  "actual 
settler,"  in  said  paragraph  2,  the  qualifying  phrase 
"on  the  land  sold  to  him." 

The  Court  erred  in  adjudging  and  decreeing  that 
the  defendants  and  their  respective  officers  and 
agents  be  and  are  by  said  decree  enjoined  from  sell- 
ing any  of  the  timber  on  said  lands,  except  as  a  part 
of  and  in  conjunction  with  the  land  on  which  the 
timber  stands;  also  from  cutting  or  removing,  or 
authorizing  the  cutting  or  removal  of  any  timber 
thereon,  except  in  connection  wTith  the  sale  of  the 
land  bearing  the  timber ;  also  from  selling  any  min- 
eral or  other  deposits  in  said  lands,  except  as  a  part 
of  and  in  conjunction  wTith  the  land  in  which  the 
mineral  or  other  deposits  are  found;  also  from  re- 
moving or  authorizing  the  removal  of  mineral  or 
other  deposits  therein,  except  in  connection  with  the 


74         Oregon  dc  California  E.  R.  Co.  et  al. 

sale  of  the  land  containing  the  mineral  or  other 
deposits. 

The  Court  erred  in  its  said  decree  in  incorporat- 
ing into  and  making  part  of  the  general  injunction 
therein  injunctive  matter  touching  the  sale  of  the 
timber  on  said  lands,  except  as  a  part  of  and  in  con- 
junction with  the  land  on  which  the  timber  stands; 
and  touching  the  cutting  or  removal,  or  the  authoriz- 
ing of  the  cutting  or  removal  of  any  of  the  timber 
thereon,  except  in  connection  with  the  sale  of  the 
land  bearing  such  timber;  likewise  touching  the  sale 
of  any  mineral  or  other  deposits  in  said  lands,  except 
as  a  part  of  and  in  conjunction  with  the  land  in  which 
the  mineral  or  other  deposits  are  found;  and  also 
touching  the  removing  or  the  authorizing  of  the  re- 
moval of  mineral  or  other  deposits  in  said  land, 
except  in  connection  with  the  sale  of  the  land  con- 
taining such  mineral  or  other  deposits. 

The  Court  erred  in  not  holding  and  decreeing  that 
there  was  a  complete  and  absolute  grant  in  this  case 
to  the  railroad  company,  with  power  to  sell,  limited 
only  as  prescribed  by  the  Granting  Act  and  Acts. 

The  Court  erred  in  not  holding  and  decreeing  that 
the  language  of  the  grants  herein  and  of  the  limita- 
tions upon  them  is  general,  and  that  it  was  not  com- 
petent to  the  said  Court  to  attach  exceptions  thereto 
in  its  decree. 

The  Court  erred  in  not  holding  and  decreeing  that 
the  terms  of  the  settlers'  proviso  or  clause  in  the 
Granting  Act  and  Acts  are  prohibitive  and  not  com- 
pulsory; and  in  not  holding  and  decreeing  that  the 
observance  of  such  terms  would  consist  in  refrain- 


vs.  United  States  of  America.  75 

ing  from  making  sales  to  other  than  actual  settlers 
in  quantities  exceeding  160  acres  to  any  one  pur- 
chaser, for  a  price  exceeding  $2.50  an  acre. 

The  Court  erred  in  not  holding  that  the  company, 
under  a  complete  and  absolute  grant  to  it,  with  power 
to  sell,  limited  only  as  prescribed,  might  choose  the 
actual  settler,  might  sell  for  any  price  not  exceeding 
$2.50  an  acre,  and  might  sell  in  quantities  of  40,  60, 
or  100  acres,  or  any  amount  not  exceeding  160  acres. 

The  Court  erred  in  not  holding  and  decreeing  that 
there  was  a  complete  and  absolute  grant  to  the  rail- 
road company,  with  power  to  sell,  limited  only  as  pre- 
scribed in  the  Granting  Act  and  Acts ;  and  erred  in 
not  holding  and  decreeing  that  there  was  no  obliga- 
tion imposed  upon  the  railroad  company  to  sell. 

The  Court  erred  in  not  holding  and  decreeing 
that  the  Granting  Act  and  Acts  did  not  impose  an 
affirmative  obligation  on  the  railroad  company  to  sell 
the  lands,  and  in  not  holding  and  decreeing  that  the 
so-called  settlers'  proviso  or  clause  in  the  Granting 
Act  and  Acts  had  application  only  as  and  when  the 
railroad  company  made  sales  of  the  land. 

The  Court  erred  in  not  holding  and  decreeing  that 
the  railroad  company,  so  long  as  the  granted  lands 
were  not  sold  by  it  but  remained  unalienated,  had 
a  complete  and  absolute  title  thereto,  and  under  such 
circumstances,  and  as  the  owner  of  such  a  title,  had 
the  right  to  sell,  cut,  remove,  or  authorize  the  cutting 
or  removal  of  the  timber  thereon;  and  the  Court 
erred  similarly  in  not  so  holding  and  decreeing  with 
reference  to  any  mineral  or  other  deposits  in  or 
products  out  of  said  lands — subject  to  such  qualifi- 


76         Oregon  &  California  R.  R.  Co.  et  al. 

cations  as  may  arise  from  the  limited  injunction  re- 
ferable to  the  period  of  six  months,  as  expressed  in 
the  opinion  of  the  Supreme  Court. 

The  Court  erred  in  not  holding  and  decreeing  that 
the  language  of  the  so-called  settlers'  clause  or  pro- 
viso in  the  Granting  Act  and  Acts  is  not  directive, 
but  restrictive  only,  and  that  with  this  exception,  so 
far  as  the  said  timber  or  mineral  deposits  or  other 
products  are  concerned,  or  any  or  either  of  them, 
the  grant  of  the  said  lands  was  unqualified. 

The  Court  erred  in  not  holding  and  decreeing  that 
under  the  said  Granting  Act  and  Acts  the  railroad 
company  had  a  discretion  of  sale  and  the  choice  of 
time  and  settlers;  and  further  erred  in  not  holding 
and  decreeing  that,  pending  the  exercise  of  such  dis- 
cretion by  a  sale  in  accordance  with  the  requirements 
of  the  Granting  Act  and  Acts,  the  said  railroad  com- 
pany had  a  complete  and  absolute  grant  of  the  lands ; 
and  was  entitled,  as  of  right,  to  the  timber  thereon 
and  to  the  mineral  or  other  deposits  therein,  and 
to  the  products  of  the  soil  thereof ;  and  was  entitled, 
as  of  right,  to  sell,  cut,  and  remove  such  timber,  or 
to  authorize  the  cutting  or  removal  of  the  same,  and 
to  remove,  sell  or  otherwise  enjoy  mineral  or  other 
deposits  therein,  or  any  products  of  the  soil  thereof — 
subject  to  any  qualifications  arising  out  of  the  limited 
injunction  referable  to  the  six  months'  period  above 
mentioned. 

The  Court  erred  in  not  holding  and  decreeing  that 
the  railroad  company,  so  long  as  it  occupied  the 
status  of  an  owner  of  unalienated  lands  within  the 
limits  of  the  grant  and  grants,  had  all  the  rights 


vs.  United  States  of  America.  77 

therein  of  a  grantee  in  fee  simple,  including  the 
rights  of  such  grantee  to  the  timber  thereon  or  to 
the  mineral  or  other  deposits  therein,  or  to  the  prod- 
ucts of  the  soil  thereof — subject  to  any  qualification 
as  aforesaid,  arising  out  of  said  limited  injunction. 

The  Court  erred  in  not  holding  and  decreeing  that 
the  provisions  of  the  so-called  settlers'  proviso  and 
clause  in  the  Granting  Act  and  Acts  were  not  di- 
rective, but  restrictive  only;  and  erred  in  not  hold- 
ing and  decreeing  that,  subject  to  the  restriction,  the 
railroad  company  took  the  grant  and  grants  with  the 
right  to  cut  timber  thereon,  or  open  and  work  mines 
therein,  or  cultivate  the  soil  thereof,  and  own,  sell, 
use  and  enjoy  such  timber,  or  the  products  of  such 
mines,  or  the  cultivation  of  such  soil — subject  to  any 
qualification  as  aforesaid  arising  out  of  said  limited 
injunction. 

The  Court  erred  in  not  holding  and  decreeing  that 
timber  cut  upon  the  granted  lands,  while  the  same 
remained  unalienated  in  the  railroad  company,  be- 
longed to  said  railroad  company;  and  likewise  as  to 
any  minerals  extracted  therefrom,  or  any  products 
of  the  soil  cultivated  thereon — subject  to  any  qualifi- 
cation arising  out  of  said  limited  injunction,  refer- 
able to  the  aforesaid  period  of  six  months. 

The  Court  erred  in  not  holding  and  decreeing  that 
the  railroad  company  took  the  lands  in  question  in 
fee  and  was  accordingly  entitled  to  make  any  use 
thereof  not  in  violation  of  the  restrictive  covenants 
found  in  the  so-called  settlers'  proviso  and  clause  in 
the  Granting  Act  and  Acts,  and  not  in  violation  of 
the  limited  injunction  as  aforesaid. 


78         Oregon  &  California  R.  R.  Go.  et  al. 

The  Court  erred  in  making  and  entering  a  decree 
herein  in  modification  and  enlargement  of  the  terms 
of  the  mandate  from  the  Supreme  Court  of  the 
United  States. 

The  Court  erred  in  not  making  and  entering  a  de- 
cree herein  responsive  to  the  mandate  of  the  Su- 
preme Court  of  the  United  States,  without  modifi- 
cation or  enlargement,  and  in  the  terms  of  the  opin- 
ion to  which  the  said  mandate  referred,  and  which 
was  expressive  of  the  mandate  itself. 

The  Court  erred  in  adjudging  and  decreeing  that 
the  complainant  have  and  recover  from  the  defend- 
ants, Oregon  and  California  Railroad  Company, 
Southern  Pacific  Company,  Stephen  T.  Gage,  indi- 
vidually and  as  trustee,  and  Union  Trust  Company, 
individually  and  as  trustee,  and  each  of  them,  or 
from  any  or  either  of  them,  any  costs  or  disburse- 
ments herein;  and  in  adjudging  and  decreeing  that 
execution  issue  against  the  said  defendants,  or  any 
or  either  of  them,  for  any  costs  or  disbursements 
herein. 

The  Court  erred  in  not  holding  and  decreeing  that 
no  costs  or  disbursements  should  be  recovered  herein 
from  the  Oregon  and  California  Railroad  Company, 
or  the  Southern  Pacific  Company,  or  Stephen  T. 
Gage,  individually  and  as  trustee,  or  Union  Trust 
Company,  individually  and  as  trustee,  or  any  or 
either  of  them. 

The  Court  erred  in  not  holding  and  decreeing  that 
the  main  contention  of  the  Government,  and  the  one 
insisted  upon  in  its  bill  of  complaint  and  at  the  trial 
of  the  cause,  was  the  contention  that  the  so-called 


vs.  United  States  of  America.  79 

settlers'  clause  and  proviso  in  the  Granting  Act  and 
Acts  was  a  condition  subsequent ;  and  in  not  holding 
and  decreeing  that  the  said  defendants  last  named, 
and  each  and  every  of  them,  were  justified  and  acted 
of  right  in  resisting  such  contention,  both  below  and 
on  appeal ;  and  in  not  holding  and  decreeing  that  in- 
asmuch as  the  said  defendants  had  prevailed  in  re- 
sisting such  contention,  it  was  not  equitable  to  tax 
them,  or  either  of  them,  with  costs  and  disbursements 
herein  in  favor  of  the  complainant. 

The  Court  erred  in  not  holding  and  decreeing  that 
it  was  inequitable  to  impose  costs  herein  in  favor  of 
complainant  on  the  said  defendants ;  and  in  not  hold- 
ing and  decreeing  that  the  case  here  should  be  dis- 
posed of  without  adjudging  costs  in  favor  either  of 
said  defendants  or  of  the  complainant,  leaving  each 
to  bear  the  costs  of  his  or  its  own  side  of  the  litigation. 

The  Court  erred  in  not  making  and  entering  as  and 
for  its  decree  in  this  cause,  and  in  place  and  stead 
of  the  decree  made  and  entered  by  it  as  aforesaid, 
the  decree  in  the  form  tendered  to  it  by  the  said  last- 
named  defendants  and  each  and  every  of  them — that 
is  to  say,  in  not  making  and  entering  as  its  decree 
in  said  cause,  the  decree  submitted  by  these  appel- 
lants to  the  District  Court  and  set  forth  in  the  afore- 
said approved  statement  of  the  case. 

The  appellee  in  substance  contended: 

1. 

That  the  decree  as  entered  by  the  lower  court  is 
in  all  particulars  in  harmony  with  the  mandate  of 
the  Supreme  Court. 


80         Oregon  &  California  R.  R.  Go.  et  al. 

2. 
And  in  this  connection  that  the  word  "land"  or 
"ljands"  as  used  in  the  granting  acts  of  1866  and 
1870,  in  the  amendatory  act  of  1869,  and  in  the 
opinion  of  the  Supreme  Court  has  the  same  signifi- 
cance, and  that  if  it  embraces  the  timber  and  min- 
erals as  well  as  the  surface  in  the  one  case  it  must 
in  all  the  others;  and  further,  that  it  does  compre- 
hend not  only  the  surface,  but  also  the  timber  and 
minerals  in  each  instance. 

QUESTIONS  OF  LAW  CONCERNING  WHICH 
THE  CIRCUIT  COURT  OF  APPEALS  DE- 
SIRES THE  INSTRUCTION  OF  THE 
SUPREME  COURT  FOR  ITS  PROPER 
DECISION. 

1.  Was  the  decree  of  the  District  Court  of  De- 
cember 9th,  1915,  in  accordance  with  the  opinion  of 
the  Supreme  Court? 

2.  If  not,  should  the  District  Court  have  made 
and  entered  its  decree  in  manner  and  form  as  pro- 
posed to  it  by  the  defendants  in  the  decree  sub- 
mitted by  them  and  set  forth  in  the  approved  state- 
ment of  facts* 

3.  During  the  continuance  of  the  estate  granted 
by  the  acts  of  Congress  mentioned  in  the  opinion  of 
the  Supreme  Court  and  while  the  grantees  thereof 
and  their  successors  in  interest  retain  the  same,  have 
such  grantees  or  their  successors  in  interest,  within 
the  decision  of  the  Supreme  Court,  the  right  to  cut 
©r  remove  or  to  authorize  the  cutting  or  removal  of 
the  timber  thereon,  or  to  remove  or  authorize  the 


vs.  United  States  of  America.  81 

removal  of  mineral  or  other  deposits  therein  or  to 
sell  the  timber  thereon  or  the  mineral  or  other  de- 
posits therein,  apart  from  the  sale  of  the  land  bear- 
ing the  timber  or  containing  the  mineral  or  other 
deposits — except  as  such  right  is  suspended  pending 
the  Congressional  action  referred  to  in  the  decision  1 

4.  Is  the  expression,  "all  the  value  the  granting 
acts  conferred  upon  the  grantees,"  or  anything  else 
in  the  decision  of  the  Supreme  Court  contained,  to 
be  taken  as  meaning  that  said  grantees  and  their 
successors  in  interest  have  only  an  equity  in  the 
proceeds  of  the  sales  of  the  lands  in  question  to  the 
extent  of  the  statutory  selling  price  thereof. 

5.  Does  the  decree  of  the  District  Court  conform 
to  the  mandate  of  the  Supreme  Court  in  the  inser- 
tion in  the  second  paragraph  of  such  decree  of  the 
following : 

"And  from  selling  any  of  the  timber  on  said 
lands,  or  any  mineral  or  other  deposits  therein, 
except  as  a  part  of  and  in  conjunction  with  the 
land  on  which  the  timber  stands  or  in  which  the 
mineral  or  other  deposits  are  found,  and  from 
cutting  or  removing  or  authorizing  the  cutting 
or  removal  of  any  of  the  timber  thereon,  or 
from  removing  or  authorizing  the  removal  of 
mineral  or  other  deposits  therein,  except  in  con- 
nection with  the  sale  of  the  land  bearing  the 
timber  or  containing  the  mineral  or  other  de- 
posits?" 

6.  Does  the  decree  of  the  District  Court  conform 
to  the  mandate  of  the  Supreme  Court  in  failing  to 


82         Oregon  &  California  B.  E.  Co.  et  al. 

make  provision  for  the  termination  of  the  injunc- 
tion contained  in  the  decree  in  the  event  that  Con- 
gress shall  make  provision  as  therein  provided  ? 

7.     Were  costs  properly  taxed  in  this  case  against 
the  defendants  or  any  or  either  of  them? 

WM.  B.  GILBERT, 
ERSKINE  M.  ROSS, 
WM.  H.  HUNT, 
Judges  of  the  United  States  Circuit  Court  of  Ap- 
peals for  the  Ninth  Circuit. 
Dated  at  San  Francisco,  California,  this  12th  day 
of  May,  A.  D.  1916. 


No.   492. 


October  Term,  1916. 


Oregon  &  California  Railroad  Company  et  al. 

v. 
United  States. 


UPON  A  CERTIFICATE  FROM  THE  UNITED  STATES  CIRCUIT  COURT  OF 
APPEALS  FOR  THE  NINTH  CIRCUIT. 


MOTION  FOR  CERTIORARI  AND  TO  ADVANCE  HEARING. 


WASHINGTON  :  GOVERNMENT  PRINTING  OFFICE  :  1916 


Jitthc^upreme^oitrtofthclnt^d^tHtB. 

October  Term,  1916. 


Oregon  &  California  Railroad  Co.  et  al., 

v. 
United  States. 


No.  492. 


UPON  A  CERTIFICATE  FROM  THE  UNITED  STATES  CIRCUIT 
COURT  OF  APPEALS  FOR  THE  NINTH  CIRCUIT. 


MOTION  FOR  CERTIORARI  AND  TO  ADVANCE  HEARING, 


Comes  now  the  Solicitor  General  and  moves : 

1.  That  a  writ  of  certiorari  issue  to  the  Cir- 
cuit Court  of  Appeals  for  the  Ninth  Circuit  to 
bring  the  case  in  its  entirety  before  this  court. 

2.  That  the  certificate  of  the  said  Circuit  Court 
of  Appeals  on  file  herein,  dated  May  12,  1916,  to- 
gether  with  the  record  upon  which  the  cause  was 
formerly  considered  and  decided  by  this  court, 
be  taken  as  a  sufficient  return  to  such  writ  of 
certiorari. 

3.  That  thereupon  the  cause  be  advanced  for 
early  hearing. 


05057—16 


STATEMENT. 

This  suit  was  brought  pursuant  to  a  joint  resolu- 
tion of  Congress  for  the  purpose  of  determining 
the  respective  rights  of  the  United  States  and  the 
Oregon  &  California  Railroad  Co.  and  others  in 
and  to  large  and  valuable  bodies  of  land  in  Oregon 
and  Washington,  which,  subject  to  certain  restric- 
tions, had  been  granted  by  Congress  in  aid  of  rail- 
road construction  and  settlement.  From  a  final  de- 
cree of  forfeiture  entered  against  them  by  the  Dis- 
trict Court,  the  Oregon  &  California  Railroad  Co. 
and  the  other  appellants  whose  claims  are  involved 
in  these  present  proceedings,  as  well  as  numerous 
other  parties  whose  claims  have  now  been  fully 
disposed  of,  appealed  to  the  Circuit  Court  of  Ap- 
peals for  the  Ninth  Circuit.  By  certificate  and 
certiorari  the  whole  cause  came  to  this  court,  and 
after  full  consideration  was  decided  in  June,  1915. 

Oregon    &    California    Railroad    Co.    v. 
United  States,  238  U.  S.  393. 

In  disposing  of  the  matter  this  court  held  that 
the  grants  were  not  subject  to  forfeiture,  and  that 
the  decree  of  the  District  Court  was  therefore 
erroneous,  but  that  the  restrictions  set  forth  in  the 
granting  acts,  namely,  that  the  grantee  must  sell 
the  land  to  actual  settlers  only  in  quantities  not 
greater  than  one-quarter  section  to  one  purchaser, 
and  at  a  price  not  exceeding  $2.50  per  acre,  were 


obligatory  and  enforcible  as  covenants.    Further- 
more, it  declared  in  its  opinion  (p.  438) : 

This,  then,  being  the  situation  resulting 
from  conditions  now  existing,  incident,  it 
may  be,  to  the  prolonged  disregard  of  the 
covenants  by  the  railroad  company,  the 
lands  invite  now  more  to  speculation  than 
to  settlement,  and  we  think,  therefore,  that 
the  railroad  company  should  not  only  be  en- 
joined from  sales  in  violation  of  the  cove- 
nants, but  enjoined  from  any  disposition  of 
them  whatever  or  of  the  timber  thereon  and 
from  cutting  or  authorizing  the  cutting  or 
removal  of  any  of  the  timber  thereon,  until 
Congress  shall  have  a  reasonable  oppor- 
tunity to  provide  by  legislation  for  their  dis- 
position in  accordance  with  such  policy  as 
it  may  deem  fitting  under  the  circumstances 
and  at  the  same  time  secure  to  the  defend- 
ants all  the  value  the  granting  acts  conferred 
upon  the  railroads. 

If  Congress  does  not  make  such  provision 
the  defendants  may  apply  to  the  District 
Court  within  a  reasonable  time,  not  less  than 
six  months,  from  the  entry  of  the  decree 
herein,  for  a  modification  of  so  much  of 
the  injunction  herein  ordered  as  enjoins  any 
disposition  of  the  lands  and  timber  until 
Congress  shall  act,  and  the  court  in  its  dis- 
cretion may  modify  the  decree  accordingly. 

Thereupon  it  ordered  that  the  decree  of  the  Dis- 
trict Court  be  reversed  and  the  cause  remanded 
for  further  proceedings   in  accordance  with  the 


opinion.  The  mandate  was  issued  accordingly,  and 
on  December  9,  1915,  a  decree  was  entered  by  the 
District  Court  (R.  13)  which  purports  to  follow  it. 
The  injunctive  provisions  of  this  decree,  like  the 
mandate,  aim  at  two  distinct  objects ;  first,  to  forbid 
further  violations  of  the  covenants,  and,  second,  to 
preserve  the  property  wholly  intact  for  a  reason- 
able time  in  order  to  afford  opportunity  for  further 
legislation  by  Congress.  In  carrying  out  the  first  of 
these  objects  the  decree  (par.  2),  in  substance,  for- 
bids sales  of  the  land  to  persons  other  than  actual 
settlers,  or  in  quantities  greater  than  one-quarter 
section  to  one  purchaser,  or  for  prices  exceeding 
$2.50  per  acre ;  and  also  forbids  the  sale  or  cutting 
or  removal  of  any  timber,  and  the  sale  or  removal  of 
any  mineral  or  other  deposits  except  in  conjunction 
with  legitimate  sales  of  the  lands  upon  which  such 
timber  or  deposits  shall  be  found. 

For  attaining  the  second  object — preserving  the 
status  of  the  property  until  Congress  might  act — 
the  decree  (par.  3)  forbids  any  direct  or  indirect 
disposition  of  lands,  timber,  or  mineral,  or  other 
deposits,  the  cutting  of  timber,  the  removal  of  it  or 
of  mineral  or  other  deposits,  and  all  interference 
and  intermeddling  with  any  moneys  which  arose  or 
ma}^  arise  from  the  lands  and  which  are  or  may  be 
on  deposit  awaiting  the  final  decision  of  this  court 
in  this  case — 

until  Congress  shall  have  a  reasonable  op- 
portunity to  make  provision  by  legislation 


for  the  disposition  of  said  lands,  timber, 
money,  mineral  or  other  deposits,  in  accord- 
ance with  such  policy  as  Congress  may  deem 
fitting,  under  the  circumstances,  and  at  the 
same  time  secure  to  the  defendant  all  the 
value  that  the  said  granting  acts  conferred 
upon  the  grantees. 

The  decree  of  the  District  Court  also  provides 
that  if  Congress  fails  to  make  provision  for  the 
disposition  of  the  said  lands,  money,  timber,  min- 
eral and  other  deposits,  the  defendants  may  apply 
to  that  court  within  a  reasonable  time,  not  less  than 
six  months  from  the  entry  of  the  decree,  for  a  modi- 
fication of  so  much  of  the  injunction  as  forbids  any 
disposition  of  the  said  lands,  timber,  etc.,  until  Con- 
gress shall  act,  and  the  court  reserves  the  right  to 
modify  the  decree  in  that  regard  and  upon  such 
application  if,  in  its  opinion,  good  cause  should 
then  exist  for  so  doing. 

The  decree  also  taxed  costs  and  disbursements 
against  appellants  and  in  favor  of  the  complainant 
in  the  simi  of  $6,249.42. 

From  this  decree  the  defendants  and  appellants, 
on  January  8,  1916,  took  an  appeal  to  the  Circuit 
Court  of  Appeals. 

The  errors  assigned  and  argued  in  the  briefs  filed 
in  the  Circuit  Court  of  Appeals  include  the  follow- 
ing questions,  viz : 

1.  Whether  the  decree  erroneously  exceeds  the 
directions  contained  in  the  mandate. 


2.  Whether  in  that  portion  of  the  decree  which 
forbids  further  violations  of  the  covenants,  it  was 
erroneous  to  forbid  selling,  cutting  and  removing 
of  timber  and  selling  and  removing  of  mineral  or 
other  deposits,  apart  from  the  sale  of  the  land  bear- 
ing or  containing  the  same. 

Here  appellants  argue  that  the  timber  (which 
constitutes  the  chief  value  of  the  remaining 
lands)  is  the  absolute  property  of  the  railroad  com- 
pany and  may  be  used  or  disposed  of  at  its  discre- 
tion, with  no  limit  or  restriction  whatsoever,  save 
possibly  such  as  might  be  inferred  to  avoid  dimin- 
ishing the  availability  of  the  land  for  cultivation 
by  settlers.  They  make  a  similar  argument  re- 
garding possible  deposits  of  mineral. 

3.  Whether  that  portion  of  the  decree  (par.  3) 
which,  following  the  mandate,  aims  to  afford  rea- 
sonable opportunity  for  legislation  by  Congress, 
improperly  included  with  the  lands  the  timber  and 
minerals,  etc.,  and  such  moneys  as  have  been  or 
may  be  deposited  to  await  the  final  decision  of  this 
case  by  this  court. 

4.  Whether,  without  regard  to  the  scope  of  the 
mandate,  the  District  Court,  or  this  court,  had 
jurisdiction  to  forbid  disposition  of  timber  for  any 
period  of  time  to  await  legislation  by  Congress. 

This  question  is  raised  in  one  of  the  briefs  but  not 
specifically  by  the  assignments  of  error. 

5.  Whether  it  was  erroneous  to  impose  costs  on 
the  appellants. 


All  of  the  foregoing  questions,  except  the  fourth,, 
reappear,  in  various  forms  of  statement,  in  the  list 
of  questions  certified  by  the  Circuit  Court  of  Ap- 
peals (R.  80). 

That  court  also  asks  (question  6)  whether  under 
the  mandate  the  District  Court  should  have  made 
provisions  "  for  the  termination  of  the  injunction 
contained  in  the  decree  in  the  event  that  Congress 
shall  make  provision  as  therein  provided. ' ' 

On  June  9,  1916,  six  months  from  the  entry  of 
the  District  Court 's  decree,  the  President  approved 
an  act  of  Congress  (Public,  No.  86,  64th  Congress) 
entitled  "An  act  to  alter  and  amend  [the  granting 
and  amendatory  acts,  naming  them],  and  for  other 
purposes, ' '  of  which  act  it  is  assumed  the  court  will 
take  judicial  notice. 

This  was  the  result  of  elaborate  hearings  before 
the  Committees  of  the  House  and  Senate  on  Public 
Lands,  and  full  report  made  by  those  two  bodies  to 
the  two  Houses  respectively.  In  a  series  of  re- 
citals, it  refers  to  the  restrictions  in  the  granting 
acts,  the  wilful  violation  thereof  by  the  railroad 
company,  the  decree  of  this  court,  the  provisions  in 
the  granting  act  of  July  25,  1866,  allowing  altera- 
tion, amendment  or  repeal,  and  the  fact  that  the 
railroad  company  and  its  predecessors  in  interest 
' '  received  a  large  sum  of  money  from  sales  of  said 
land  for  prices  in  excess  of  $2.50  per  acre,  and  from 
leases,  interest  on  contracts,  and  so  forth  ";  al- 
though  "  the   aforesaid   granting   acts   conferred 


8 

upon  the  said  railroad  company  the  right  to  re- 
ceive not  more  than  $2.50  per  acre  for  each  acre  of 
land  so  granted."  It  thereupon  provides,  compre- 
hensively and  specifically : 

1.  For  the  immediate  revesting  in  the  United 
States  of  the  title  to  all  the  lands  for  which  pat- 
ents had  been  issued  or  earned  under  the  granting 
acts,  except  those  which  had  been  sold  by  the  rail- 
road company  prior  to  July  1,  1913  (the  date  of 
the  District  Court's  original  decree  of  forfeiture), 
and  except  those  constituting  the  railroad  right  of 
way  and  those  in  actual  use  by  the  company  prior 
to  December  9,  1915  (date  of  the  District  Court's 
last  decree),  for  depots  and  other  specified  rail- 
road uses. 

2.  For  the  classification  of  the  lands  into  power 
site  lands,  timberlands,  and  agricultural  lands,  by 
the  Departments  of  Interior  and  Agriculture. 

3.  For  the  use  and  disposition  of  power  site  and 
mineral  lands  in  accordance  with  the  general  laws 
concerning  public  lands  of  like  character;  for  the 
sale  of  the  timber  on  the  lands  classified  as  timber- 
lands  through  competitive  bidding,  "  as  rapidly 
as  reasonable  prices  can  be  obtained  therefor  in  a 
normal  market;"  for  the  settlement,  cultivation, 
and  purchase  at  $2.50  per  acre  of  the  lands  classi- 
fied as  agricultural,  under  the  homestead  laws  as 
modified  by  this  act ;  and  for  a  similar  disposition, 
omitting  the  money  charge,  of  the  lands  classified 
as  timberlands  after  the  timber  shall  have  been 
removed  from  them. 


Certain  of  the  lands  affected  by  the  act  are  de- 
clared to  be  withheld  from  entry  or  other  disposi- 
tion for  a  period  of  2  years  after  its  approval 
(sec.  5,  bottom).  These  lands,  we  understand,  con- 
sist of  sections  necessary  to  protect  the  water  sup- 
ply of  certain  cities,  and  the  withdrawal  was  in- 
tended to  afford  them  an  opportunity  to  acquire 
the  lands. 

4.  For  vesting  in  the  United  States  forthwith  of 
"  the  title  to  all  money  arising  out  of  said  grant 
lands  and  now  on  deposit  to  await  the  final  out- 
come "  of  this  suit. 

5.  For  the  deposit  of  all  moneys  received  from  or 
on  account  of  the  lands  and  timber  under  the  act 
in  a  special  fund  to  be  designated  ' '  the  Oregon  and 
California  land-grant  fund." 

6.  For  the  payment  "  as  soon  as  may  be  after  the 
approval  of  this  act  "  by  the  Treasurer,  upon  the 
order  of  the  Secretary  of  the  Interior,  of  "  the 
taxes  accrued  and  now  unpaid  on  the  lands  revested 
in  the  United  States,"  for  which  purpose  the  act 
appropriates  the  necessary  money. 

7.  For  the  ascertainment  and  determination, 
through  judicial  proceedings  to  be  instituted  by  the 
Attorney  General,  of  "  the  amount  of  moneys  which 
have  been  received  by  the  said  railroad  company  or 
its  predecessors  from  or  on  account  of  any  of  said 
granted  lands,  whether  sold  or  unsold,  patented  or 
unpatented,  and  which  should  be  charged  against  it 
as  a  part  of  the  '  full  value  '  secured  to  the  grantees 


10 

under  said  granting  acts  as  heretofore  interpreted 
by  the  Supreme  Court,"  in  the  ascertainment  of 
which  amount  the  court  "  shall  take  into  consid- 
eration and  give  due  and  proper  legal  effect  to  all 
receipts  for  money  from  sales  of  land  or  timber, 
forfeited  contracts,  rent,  timber  depredations,  and 
interest  on  contracts,  or  from  any  other  source  re- 
lating to  said  lands;  also  to  the  value  of  timber 
taken  from  said  lands  and  used  by  said  grantees 
or  their  successor  or  successors,"  and  shall  also 
determine  "  the  amount  of  the  taxes  on  said  lands 
paid  by  the  United  States,  as  provided  in  this  act, 
and  which  should  in  law  have  been  paid  by  the  said 
Oregon  &  California  Railroad  Co.,  and  the  amount 
thus  determined  shall  be  treated  as  money  received 
by  said  railroad  company." 

8.  For  the  ascertainment  by  the  Secretary  of  the 
Interior,  as  soon  as  may  be,  of  the  acreage  of  the 
lands,  whether  sold  or  unsold,  which  the  beneficia- 
ries have  received  or  are  entitled  to  receive  under 
the  grants,  and  the  value  of  such  acreage  at  $2.50 
per  acre,  and  for  the  payment  of  that  value,  less 
the  amount  chargeable  to  the  railroad  company  and 
its  predecessors  as  found  and  determined  in  the 
judicial  proceedings,  to  the  railroad  company,  its 
successors  or  assigns,  and  to  lienors  as  their  re- 
spective interest  may  appear,  the  payment  to  be 
made  in  instalments  from  time  to  time,  out  of  the 
special  fund  as  it  accumulates,  by  the  Treasurer  of 
the  United  States  upon  the  order  of  the  Secretary 


11 

of  the  Interior;  and  it  being  further  provided: 
"  That  if,  upon  the  expiration  of  ten  years  from 
the  approval  of  this  act,  the  proceeds  derived  from 
the  sale  of  lands  and  timber  are  not  sufficient  to 
pay  the  full  amount  which  the  said  railroad  com- 
pany, its  successors  or  assigns,  are  entitled  to  re- 
ceive, the  balance  due  shall  be  paid  from  the  general 
funds  in  the  Treasury  of  the  United  States,  and  an 
appropriation  shall  be  made  therefor. ' ' 

9.  For  depositing  the  further  proceeds  from  the 
sales  of  land  and  timber,  after  so  satisfying  the 
railroad  company  and  the  lienors,  partly  in  the 
State  and  county  funds  for  schools,  roads,  etc.,  and 
appropriating  the  remainder  for  the  United  States. 

The  above  resume  is  general  in  character,  aiming 
only  to  explain  the  important  features  of  the  legis- 
lation which  bear  relation  to  the  issues  involved  in 
this  litigation. 

On  or  about  June  30,  1916,  the  appellants  served 
upon  the  Congress,  through  its  presiding  officers, 
and  upon  the  President,  the  Secretary  of  the  Inte- 
rior, the  Secretary  of  Agriculture,  the  Attorney 
General,  and  the  Treasurer  of  the  United  States, 
a  notice  in  writing  claiming  and  asserting  that  this 
act  is  unconstitutional,  null  and  void,  declaring 
that  the  appellants  do  not  assent  to  or  acquiesce 
in  any  of  its  provisions,  and  protesting  against  the 
assertion  by  the  United  States  of  any  claim  to  the 
lands  or  to  any  moneys  derived  therefrom,  and  the 
taking  by  the  United  States  of  any  action  or  pro- 


12 

ceeding  for  the  purpose  of  carrying  out  the  act  in 
any  of  its  provisions;  and  further  protesting 
against  the  making  by  the  Secretary  of  the  Interior 
of  any  order  for  the  payment  of  taxes  on  the  lands, 
and  against  the  payment  of  any  such  taxes  by  the 
Treasurer,  as  provided  by  said  act,  etc. 

Since  the  passage  of  the  act  the  work  of  classify- 
ing the  lands  as  thereby  required  has  been  proceed- 
ing rapidly.  The  Land  Department  reports  that 
thousands  of  acres  have  already  been  classified, 
and  that  numerous  applications  for  sales  of  timber 
are  already  on  file  and  subject  to  be  acted  upon  as 
soon  as  the  work  of  ascertaining  the  amounts  of 
accrued  taxes  (now  well  advanced)  can  be  con- 
cluded, and  the  taxes  paid.  The  taxes  claimed  by 
the  States  exceed  a  million  dollars. 

REASONS  FOR  THE  MOTION. 

1.  The  act  of  June  9,  1916,  assuming  it  valid, 
has  rendered  moot  every  specific  question  presented 
by  the  certificate  save  the  question  of  costs.  By 
its  operation  the  Government  has  now  taken  over 
the  title  to  the  land,  with  all  its  timber  and  other 
resources,  and  also  the  moneys  on  deposit  which  are 
mentioned  in  the  District  Court's  decree.  The  in- 
terest of  the  railroad  company  is  no  longer  an  in- 
terest in  these  things,  but  an  interest  in  obtaining 
prompt  adjudication,  settlement  and  payment  of 
its  monetary  claim,  through  the  methods,  including, 


13 

if  necessary,  the  money  appropriation,  for  which 
the  act  provides. 

2.  The  general  questions  certified,  viz,  whether 
the  decree  of  the  District  Court  accords  with  the 
mandate,  and  whether  a  decree  should  have  been 
entered  in  manner  and  form  as  proposed  by  the 
appellants  (R.  80,  11),  though  they  amount  to  a 
submission  of  the  entire  case  as  it  was  before  the 
act  was  passed,  seem  not  to  empower  this  court  to 
deal  fully  and  finally  with  the  existing  situation. 
Should  those  questions  be  answered  without  regard 
to  the  act,  new  controversies  concerning  its  validity 
and  meaning  would  be  precipitated  in  the  lower 
courts  which  must  finally  come  here  after  much 
expensive  and  embarrassing  delay.  On  the  other 
hand,  should  this  court  consider  the  validity  and 
effect  of  the  act,  but  merely  in  connection  with 
a  disposition  of  the  questions  certified,  the  ensuing 
decree  of  the  Circuit  Court  of  Appeals  would 
doubtless  be  appealed  from  and  the  act  and  its 
meaning  would  again  become  involved  before  this 
tribunal. 

3.  If,  as  the  Government  insists,  the  act  is  valid, 
probably  a  modified  decree  should  now  be  directed, 
so  that  the  injunction  may  be  made  absolute  and 
the  moneys  on  deposit  be  delivered  to  the  proper 
governmental  depository.  If  it  be  in  any  regard 
invalid,  the  nature  and  extent  of  such  invalidity, 
and  the  time  during  which  the  property  may  be 
held  intact  pending  further  legislation,  should  be 


14 

conclusively  determined  by  this  court  without  the 
intervention  of  useless  proceedings  in  the  lower 
courts. 

4.  The  Government  and  the  States  and  local  com- 
munities where  the  lands  are  situated  are  deeply 
concerned  in  the  prompt  and  conclusive  dissipation 
of  any  possible  doubt  concerning  the  validity  of  the 
act  of  Congress.  If  the  act  be  invalid,  that  fact 
should  be  known  before  further  important  steps  are 
taken  in  its  administration,  before  sales  are  made 
or  settlements  allowed  and  the  money  of  purchasers 
and  settlers  is  accepted,  before  large  additional  ex- 
penditures of  public  money  are  incurred,  in  the 
payment  of  taxes,  or  in  work  of  investigation,  and 
before  the  institution  of  the  new  legal  proceedings 
which  the  act  directs. 

Respectfully  submitted. 

John  W.  Davis, 
Solicitor  General. 

October,  1916. 


O 


14  DAY  USE 

RETURN  TO  DESK  FROM  WHICH  BORROWED 

LOAN  DEPT. 

This  book  is  due  on  the  last  date  stamped  below,  or 

on  the  date  to  which  renewed. 

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